Public sector performance should be viewed holistically – Cabraal
By Rajiesh Seetharam
State Minister for Money, Capital Market and State Enterprise Reforms, Ajith Nivard Cabraal stated that the performance of Public Sector institutions should be viewed from a holistic view, instead of looking only at balance sheets or a particular event or on decisions they make.
Speaking at an event organised by the Institute of Chartered Accountants of Sri Lanka, the Minister who was also the former Central Bank Governor said, “In 2012, the Central Bank made its highest return on its reserves, making USD 430 million or 6.6%. However, the Committee on Public Enterprises (COPE) investigated the USD 12 million Greek Bonds, which were widely publicized. However, a USD 430 million return was made after deducting the USD 12 million Greek Bond losses. But after 2012, the return on reserves was less than 1.5%, which is not widely noticed.” The role of public institutions is different from private institutions and their performance should be valued accordingly, the Minister said. “Some of these public institutions aren’t making profits, not because of inefficiency but due to government policy, where service to the people is a priority compared to making profits. Often people are not aware of the constraints under which the public sector works. During the COVID-19 period, the public sector worked efficiently to keep the economy going. Banks, the Customs, State hospitals and the Ports Authority are all part of the public sector which worked hard to keep the economy rolling, during the COVID-19 period.” The Minister further said the low interest rates helped many private companies to show good results in the last two quarters.
“If the Railways Department wants to make a profit, they could increase train fares but what would be the impact on the people? The Petroleum Corporation could do the same by increasing by Rs 20. Even the Central Bank can make a profit of Rs 60 million if they depreciate the currency by Rs 10 billion. But they are not expected to make profits like normal private institutions. Thus their performance should be viewed from a holistic view”, said Cabraal.