Privatization in Sri Lanka: Social Effects and Restructuring

The study analyses the Sri Lankan experience of privatization since 1989, and the impact it has on workers employed directly by the firms. The first half of the discussion focused on preparation and approaches to privatization, with its pros and cons, adequacies and inadequacies.

The rest of the paper analyses the effects privatization has had on employment (during and after privatization, such as redundancies, retraining, redeployment, working conditions, workers’ rights, compensation, etc.), approaches used in dealing with the effects on employment, and the lessons learned in the process.

This is followed by a brief on post-privatization action and future privatizations planned. The paper concludes by recommending various measures to minimize the social ill effects of privatization. These include making refinements in pre-privatization preparations (including regulatory aspects), improving labour management dialogue, and adopting alternative approaches to retrenchment.

Research team

Rozana Salih