Daily Times

Governments should not be in the business of running a business! That, of course, is the mantra behind the concept of privatisation of state owned enterprises (SOEs). The idea of privatisation came home to me in a more direct way when I recently travelled to the US and back by Pakistan International Airlines (PIA). During the flight back from the US I had a lot of time on my hands to think about this and even talk to some of the cabin ‘crew’ about it.
First, a bit about the service on PIA. Before I go further, I must admit that I was travelling in business class and, as such, I cannot really comment on what went on in the ‘back’ and how those passengers were being treated. However, I can say without any reservation that at least the service up front was pretty good and I have no complaints about it. Yes, the seats looked a bit ragged and the ‘entertainment’ systems on some seats did not work all that well but those, at best, are quibbles.
Frankly, PIA provides almost direct service between Lahore and New York (JFK) at prices that are much lower than those charged by most other airlines. Yes, the ‘security’ stopover on the way to the US at Manchester is a bit ‘peculiar’ but, on the way back, it is a non-stop flight and that sort of makes up for the unpleasantness at Manchester.
So, now to the privatisation of PIA. I had a discussion about the matter with some of the crew (not the pilots) and asked them particularly about the ‘problems’ with PIA. First was about airplane maintenance. The crew member I spoke to said that because of fewer planes in service, PIA planes were being forced to turnaround after a short time on the ground and that made proper maintenance between flights, especially the cleanliness part, quite difficult.
The second point I raised was about the ‘excessive’ number of employees PIA had compared to the number of planes in service. About this, the crew member said something rather interesting. He pointed out that PIA planes were rapidly going out of service because of age and, as such, the employees-to-plane ratio was being skewed. He also told me that a large number of employees were retiring soon and that should improve this situation as also would the fact that PIA was in the process of acquiring more planes. Another fact he pointed out was that, compared to many competing airlines, PIA crew members were paid much less.
In essence, this crew member felt that with newer planes being added to the fleet, PIA could become profitable, and that privatisation would not be necessary. He also pointed out that all the major ‘Gulf’ airlines were government-owned and were doing quite well; in his opinion, being government owned was not necessarily a bad thing. At about this time, another, younger crew member joined the discussion. The younger crew member felt that privatisation would be good for PIA and would make it a much better run airline. The response of the older and perhaps ‘wiser’ crew member, in my opinion, sums up the privatisation debate in one sentence. He said: “Yes, privatisation might be good for PIA but in what way will it be good for the country?”
Here, I have a confession to make. For reasons that are entirely obscure, a few years ago I spent a year as a member of the board of the Privatisation Commission of Pakistan. Of my experience during that time I can say this: the previous government was definitely not interested in privatisation and, more importantly, the SOEs running at a serious loss were in such bad shape that nobody in the private sector wanted to buy them! And that is the privatisation conundrum. If an SOE is running at a serious loss, who wants to buy it and, if it is making a profit, why sell it?
That brings up an interesting question. Our new government at the Centre is made up of some very successful businessmen. If these ‘gentlemen’ are so successful in running their personal businesses, why can they not use that expertise to make the SOEs run better and make them profitable? Would that not be a great public service for which the country should and would be excessively thankful to them for many generations?
So, back to where I started — the mantra about governments not being in the business of business. As far as this federal government is concerned, enquiring minds might want to know that what then is the business of this government? Building roads, travelling with excessive protocol, visiting foreign countries, signing an endless series of Memorandums of Understanding with anybody ready to sign such stuff, or what?
It has now been more than a year since the ‘mandate’ was given and the mandate was received. Unfortunately, since then not a single ‘mini’ watt has been added to the national grid, load shedding persists unabated, inflation inflates, law and order is a mess, corruption that directly affects ordinary people is still rampant and the begging bowl has become so big that it is no longer recognisable as a begging bowl. The only two new things happening are that a former dictator is being tried for a crime that could lead to the death penalty while murderers and terrorists are being welcomed to the negotiating table.
All this does not mean that the government should run everything. No, not at all. I have never believed in the concept of ‘public ownership’ of all means of production but I do believe that in a developing country like Pakistan where corruption is a major problem, privatisation of state assets can be fraught with massive irregularities. Our past experience with privatisation was not all that pleasant.
Finally, there is one SOE that should be immediately privatised and that is the Pakistan Cricket Board.

The writer has practised and taught medicine in the US. He can be reached at smhmbbs70@yahoo.com