The previous Rajapaksa government has put forward state-owned enterprises to obtain additional loans amounting US$ 9.5 billion from China on its behalf.
Sri Lanka has not yet secured the means to meet its upcoming foreign loan repayments — US$4.5 billion is due this year, to be followed by another US$4 billion in the year 2018.
Proper financial data was publicly available for 55 out of 255 SOE’s according to private research study.
The total losses of the 55 SOE’s from 2006-2015 amounts to a gigantic Rs. 636 billion. 5 key institutes are responsible for 95 percent of the losses which adds up to Rs. 605 billion losses.
Ceylon Petroleum Corporation, Ceylon Electricity Board, Sri Lankan Air Lines, Mihin Lanka and Sri Lanka Transportation Board are the money eating machines of poor taxpayers
To reduce public debt, the government is looking to privatize by way of PPP , state-owned enterprises (SOEs) that are currently running at a loss.
These SOEs account for more than 80 per cent of domestic debt. Sri Lanka has invited Chinese companies and others to invest in these SOEs, proposing a debt-equity swap. Chinese companies have not yet responded to these proposals.
Despite the deterioration in its balance of payments, Sri Lanka showed positive growth momentum last year. There is hope for an economic turnaround in the medium term, following the IMF loan. As an emerging market, Sri Lanka has many lucrative areas for investment, including the booming tourism sector, construction and infrastructure development, the report said.
The unpredictable economic management of the Ministry of Finance adds to this economic situation experts said.
In managing painful economic reforms, the government’s hard work is only beginning.
Sri Lanka’s balance of payments is in dire straits. The country’s mounting foreign and domestic public debt, a huge fiscal deficit and a severe foreign exchange shortfall have led to potentially calamitous economic circumstances.