After five years PPP rule the public sector corporations in Pakistan are in very poor state. Political interference, corruption, lack of vision, a dearth of skills, inadequate investment, all these factors have led to huge losses. They are being kept on support, which comes in the form of state subsidies and protection. These state enterprises are fueled by money. Governments spend millions subsidizing poor management and corruption. Consumers pay millions for the high price of inefficiency. Workers lose millions as a result of low wages and poor prospects. Public sector companies in Pakistan are now losing more than five billion dollars per year — a significant drain on government resources and the overall economy. These institutions in fact, should be productive national assets, making a contribution to the progress and welfare of the country.
Political interference for sure leads to a massive waste of public resources. Excessive political interference by the parent ministries and other political actors has seriously eroded the operational autonomy for many public enterprises. Persistent political interference lack of discipline, and poor transparency in state-owned companies—including Railways, PIA, Steel Mill, NICL, ZTBL, EOBI, and Postal service, among several others—has significantly hampered their productivity, efficiency, and profitability, wasting resources, and distorting competition. Years of politicization, corruption, mismanagement lack of vision and discipline have stripped them of their potential making them colossal liabilities.
Over the years enormous amounts of money have been spent to sustain these ailing state corporations. Government has borrowed heavily from the state banks and from foreign financial institutions. Aid donors will no longer support wasteful expenditure. The incoming Government should focus on improving governance mechanisms, raising public sector performance, strengthening stakeholder networks, building delivery capacity, creating reforms for change, advocating for participative social programs and setting standards for accountability for a more responsive governance. Internal & external auditors and governing boards have proved to be less effective in monitoring and uncovering matters of abuse or misuse of power and resources among these public corporations which needs to be strengthened. The inefficiency of our national companies is choking the economy and draining fiscal resources, necessitating urgent restructuring of their operations. Therefore, either unproductive state enterprises will have to be restructured or shut down, or the entire economy will go bankrupt.
Developed nations are developed only because they have sound financial and political institutions. Poor nations like ours are lagging in these areas. So reforms and revolutions are the need of the hour. In the past, the institutions were not allowed to be developed and to have a change. The best solution was to privatize the loss sustaining entities but it was not done. However in some cases privatizations proved to be unsuccessful. In some other cases it has not been executed with transparency. It will have to be seen. For efficiency purposes, procedures must be established so that the officials appointed on merit remain in office irrespective of political changes and circumstances.
In order for state-owned entities to revive and flourish, government should not interfere in these companies, which are commercial bodies. The companies must have conditions similar to that of the private sector. Financial protection to public corporations must also be limited. The Government should provide the corporations with sufficient autonomy in day‑to‑day activities and operations while at the same time allowing the government an appropriate level of direction and control. Appointments to the board of directors should be made purely on the basis of merit keeping in view relevant practical experience and knowledge. CEO should be appointed by the concerned Ministry on the recommendation of the Board. The corporations should establish their own internal policies and practices on governance, consistent with government guidelines. The Auditor General of Pakistan should be appointed auditor for all corporations.
In order to achieve the goal, all corporations must be made fully autonomous, and they should be made answerable not to the government but to the legislature. In addition, well qualified professionals need to head these organisations so that the pitiable conditions in which most of them are today can be reversed. All of us are asked today to say “no” to drugs, smoking and alcohol. May I also ask the political parties, their leaders, cadres, workers and affiliated unions to say “no” to political interference in corporate business?
Government should appoint competent and very patriotic persons instead of party loyalty and political colleagues to serve on boards of state institutions. It is inappropriate to use political appointments as a reward system for party loyal because it adversely affects productivity. We have seen political appointments ruining corporations that were doing so well in the past, and we will be seeing more of such disasters taking place if the trend continues. Now almost all of them have become “sick” and in urgent need of an “overhaul”. Since the incoming government have been given a clear mandate, we can expect it to do anything in this direction. It can say “no” to its MNAs / Ministers, from asking the government to appoint incapable people to top level positions or as board members in the government-owned corporations. We all know how such a practice has ruined most of these entities, brought some others to the verge of collapse, and closed some others. There are government-owned corporations today which would still do very well if they were left alone without political interference to carry out their assigned tasks.
May the grace and the mercy of Allah and the people’s prayers and support be with the incoming Prime Minister throughout, while he is righting the wrongs done to Pakistan by the out going PPP regime.
