Fixing SOEs

Unfortunately, some of our prominent State-Owned Enterprises (SOEs) are in the news once again. First, PIA, this iconic airline has just suffered yet another air crash. It is known to all and sundry that this was one of the greatest airlines in the world back in the 1960s and early 1970s, proudly conveying its esteemed passengers around the globe under the motto ‘Great people to fly with’. Is it not a matter of pride that the then first lady of the US, Jackie Kennedy, travelled all the way to Pakistan in 1962 via PIA? And now PIA stands reduced as an ill-functioning, bulging monster (akin to Pakistan Railways). Manned by tens of thousands of employees but with just three dozen or so airplanes in hand, some not even airworthy. Secondly, there is Pakistan Steel Mills Limited, the government has agreed to retrench around 9,350 employees of Pakistan Steel on one month’s notice. Such measures indicate a sign of the government’s willingness to finally tackle this loss-making behemoth in the present era of the coronavirus, which is arguably worsening our economic outlook by the day.

In the case of PIA, some sort of rescue or resuscitation plan (2-4 years) should be considered with an 'extremely competent' airline such as Qatar or Emirates that belong to friendly nations. That is only if outright privatization is not acceptable to the government. We could have a resurrection or a second birth of PIA and restore its long-lost pride. In the case of Pakistan Steel, some sort of an ambitious, out-of-the-box, public-private joint-venture initiative should be conceived, again, if privatization can be managed then it may be a better option. Nonetheless, all employees should be treated equitably when it comes to payment dues. There is no need to resort to harsh, coercive measures. Since the privatization venture began in Pakistan back in 1990-91, so many industrial and other enterprises have gone from the public to the private domain, mostly with spectacular effects upon the national economy, even though rise in prices remains a sore point. Meanwhile, once these two SOEs are reformed, I am sure the flow of economic ‘sunk-costs' from the exchequer will be reversed, thereby, creating positive multiplier effects on the economy.

Abbas R Siddiqi

Lahore