SEE HOW THEY RUN! -
The myth of the sansthawa
By Shyamon Jayasinghe,
The public corporation in Sri Lanka was born out of the
socialist emotion that swept the island post- 1956. Its disastrous record
through all regimes of government is epitomised in the following complaint
by the present chairman of the CWE that appeared online in the Daily
mirror of 23rd October 2004. Reading and studying this case would be
very instructive because there are still hordes of socialists and patriots
who are guarding the Sansthawa with religious fervour and
not allowing its natural extinction.
Read what the Chairman has to say:
CWE Chairman Upali Gooneratne told the Daily Mirror
that despite his protests against the appointment of Sri Lanka Nidhahas
Sevaka Sangamaya representative Lasantha Lakpriya as part of the eight
member CWE board he would continue to serve as Chairman until President
Chandrika Kumaratunga decided otherwise.
"I have told the Minister that this union representative was interfering
in the affairs of the CWE administration. He is just a canteen labourer
and is in no way qualified to hold such a post," he said.
Mr. Gooneratne said the Mr. Lakpriya had also interfered in some disciplinary
inquiries against four union members.
"There are 775 workers in the CWE of which 600 are labourers. About
550 of them virtually do nothing and we spend seven million rupees on
salaries every month. About 300 of them SLNSS members. The CWE is responsible
for the distribution of imported rice through cooperatives. But there
are reports that the cooperatives were selling them to private traders,"
he said. Unquote
(1)The minister has made an unsuitable appointment to
the Board of Directors. The appointment is that of a canteen labourer
to the Board of Directors. One does not need to have class feelings
to object to such an appointment to the apex of decision-making in the
(2) This individual is interfering with the management
in undesirable ways that would lead to the breakdown of discipline and
(3) The CWE is heavily overstaffed with most workers idling.
Nearly 90 per cent of this staff is bottom- heavy. All governments in
Sri Lanka have generally considered state corporations as vehicles for
favoured political appointments and not as agencies of service to the
In that era, the corporation was the chosen instrument
for a government to run a business enterprise, the idea being that the
standard government department is too rigid a structure for enterprise
decision-making. Whatever that theory may be, experience in Lanka tells
us that these institutions become too politicised to take independent
enterprise decisions and to run efficiently in enterprise terms and,
in this way, they become unsustainable. Politicians have loved such
bodies because they become a convenient vehicle to stuff their supporters
and also to show off their pakum. This explains the surplus employment
and the dominance of lower ranks in the employment structure. The result
of such politicised situations is that the organization is guaranteed
to run on red and become unmanageable. At the end of the year, the treasury
comes in to reimburse the losses, which run into huge amounts. This
results in deficit budgets and inflation, which then becomes a burden
on the people. Furthermore, this causes an opportunity cost that prevents
the treasury funds so sacrificed from being put to more productive uses
like capital investment.
However, unions and socialists fight to keep institutions
like this as sacred cows. The reasons are largely ideological,
namely that such organs of government belong to the people
and are a national asset. However, what hold do ordinary
consumers have on them? If it were a private organization, the consumer
can show its discontent by avoiding buying its products. On the other
hand, corporations have a survival power regardless of consumer disaffection.
In other words, the corporation does not belong to the people but to
its own bureaucracy.