Privatization reduces political victimization

Posted on July 30, 2007  /  0 Comments

Privatization is a controversial subject. Proponents claim it will increase efficiency; reduce the stuffing of firms with excess employees, etc. The reduction of political victimization is not a benefit that usually gets addressed.

This study also helps explain the opposition of unions in state-owned firms to privatization. They are not unions in the classic sense, but intermediaries of political victimization and corruption. As political middlemen (I hesitate to use the term, bagmen), they, oppose privatization because it removes their reason for existence and rent-seeking opportunities.

What is less easy to understand is why workers and other people of goodwill continue to have any sympathy for the claims of these political middlemen. One can support the principle of trade unionism in the private sector (where a union collectively bargains on behalf of the workers) while opposing extortion in the name of unionism which is what happens in the state sector.


Less political victimization and better benefits have seen workers of privatized Sri Lankan companies opting out of trade unions, a recent survey showed.A study done by the Centre for Poverty Analysis found that trade union influence was significantly reduced in some privatized state enterprises because of the willingness of management to listen to worker issues directly.

The study – ‘Between Theory and Rhetoric: The Workers’ Reality’ looked at three local companies – Puttalam Salt privatized in 1993, Ceylon Steel Corporation privatized in 1996 and Bogala Graphite Lanka privatized in 2000.

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