Sri Lanka is planning to list a state-owned holding company on the stock market and either merge or shut down other government agencies that are draining public funds, President Anura Kumara Dissanayake said.
He explained that many government corporations and boards are causing financial problems.
“We need a new way to manage them,” he said at an economic forum hosted by Sri Lanka’s Ceylon Chamber of Commerce.
“The current system is failing and full of corruption, which is putting a strain on government finances. Instead of sticking to the old ways, we are ready to make structural changes.
“We are considering merging these agencies into a holding company and selling shares on the stock market. We are open to this idea.”
Ceylon Chamber Chairman Duminda Hulangamuwa said Sri Lanka is aiming for economic growth similar to Southeast Asian countries.
In East Asia, countries like Vietnam have successfully grown by selling shares in state-owned companies. Vietnam’s State Capital Investment Corporation manages and lists these companies on the Hanoi and Ho Chi Minh Stock Exchange in a process called ‘equitization.’
For example, when Sri Lanka’s government took over private companies in 2011, Vietnam’s government listed its Bank for Investment and Development (BIDV) on the stock market. Other state banks like VietinBank have also been listed, with international investors like Japan’s Mitsubishi UFJ Financial Group buying stakes.
One of Vietnam’s most successful companies is Vinamilk, which was originally a state-owned enterprise created by taking over multinational companies like Nestlé and Friesland (Dutch Lady). Today, Vinamilk is a top-performing company and has even invested in the U.S.
Burden on the State
Meanwhile, President Dissanayake said a committee under the Prime Minister’s Secretary is reviewing several non-commercial government agencies that are a burden to the state.
“There are too many agencies doing the same thing,” he said. “Some were set up for needs that existed in the past. For example, the government created several construction companies when there were no strong private contractors. But now, private companies are efficient and capable. Do we still need government-run construction companies? We may have to shut some down, merge them, or change their roles.”
He acknowledged that making these changes would be difficult but necessary.
Sri Lanka is expected to grow by around 4% in 2025 as the economy recovers from the latest financial crisis. The country has faced repeated economic downturns due to unstable monetary policies, which have triggered inflation and credit issues.
