Privatization and the Public Exchequer: Some Observations from the Sri Lankan Experience
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Date
1997
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United Nations ESCAP
Abstract
This paper examines the Sri Lankan experience with privatization from 1989 to 1996 and argues that its short-run fiscal benefits have not been significant even when the direct and indirect costs of privatization are ignored. Fiscal gains from privatization should be considered long-term benefits and greater importance should be given to designing a transparent privatization programme to promote competition and to stimulate the capital market. Such a strategy can address the problem of the fiscal burden of subsidizing State-owned enterprises more effectively than a privatization programme that is designed for speedy execution in a non-transparent manner or one whose objective is to achieve
revenue targets according to short-term budgetary needs.
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Keywords
Sri Lanka, Privatisation