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Sri Lanka post: The sickly child atrophies further

When one only reforms only a part of an interconnected sector, the unreformed parts start to atrophy. Because of union resistance and the perception that the post was not that much of a money maker to start with, the hitherto conjoined posts and telecom were bifurcated and reform efforts focused on telecom. So 30 years after bifurcation, what has happened to the post, saved from from the depredations of foreign capital and World Bank advice?

Sri Lanka’s state-run postal service lost 3.0 billion rupees in 2010 up 22 percent from a year earlier, while revenues fell 6.8 percent to 4.3 billion rupees amid lower letter usage.

Data released by the Central Bank shows that expenses rose 3.1 percent to 7,330 million rupees in 2010. Revenues had fallen despite efforts to get into banking services and sell pre-paid phone cards.

Letters per inhabitant fell to 17 in 2010 from 21 in 2009, according to data released by the Central Bank.

Sri Lanka’s telecom use has been rising in recent years, and in 2010, telephones exceeded the population. Availability of phones and email use can reduce the demand for letters.

I said as much in 2007. But the Minister who was receptive to the idea, ceased to be in charge of the subject. And nothing happened. Next time we look, the losses may be more than what the post office brings in.

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