Pakistan’s backward march
Governor Sindh Mohammad Zubair recently told local media that Finance Minister Ishaq Dar had misguided former PM Nawaz Sharif on matters related to economy. According to Mr. Zubair, Mr. Dar used to misinform the PM saying “everything is alright” when in fact it was not. Fairness, however, demands that he also accepts that his promises as the former chairman of Privatization Commission never saw the light of the day.
Sans one small-ticket sell-off and few pseudo-privatization (read: capital market transactions), the privatization agenda failed to kick start. Pakistan’s very own castles in the desert continue to drain taxpayers’ money, whereas all those independent board members that Mr. Zubair had handpicked, reportedly in consultation with Shaukat Tarin, are nowhere to be found in the picture.
From this point onwards, the future of privatization in Pakistan looks uncertain. Any major transaction can hardly be expected between now and the General Elections 2018. After the elections, even if the PML-N comes to power, it wouldn’t have enough political capital to start selling off the white elephants, unless, perhaps, they win indisputably by a wholesome majority that puts all critics to shame.
With the PML-N facing hostile opposition and its key leaders facing corruption charges, an indisputable win with a wholesome majority is not a strong possibility. Meanwhile, the PTI and the PPP have already made claims that they have the magical wand to fix the PSEs, and that because privatization is a bad thing per se they have no sell-off plans whatsoever.
Perhaps, however, there is one thing PM Shahid Khaqan Abbasi can do in his short tenure: ensure that PSEs’ corporate governance (CG) rules are being followed. If all those of CG rules are politically cumbersome to implement (since the ministries don’t want to let go of their control), then at the least ensure that transparency and financial-reporting aspects of those rules are being followed so that Pakistani taxpayers at least know what is making a hole in their pockets.
And if Mr. Abbasi wants to leave a legacy insofar as PSE management is concerned, then he has a few options to explore. First, following the Malaysian Khazana Model set up a holding company for just one sector, and have the PSEs in that sector report to an independent professional board.
Or, as the Korean government did throughout the 70s, legally require the PSEs to regularly report on key aspects of their business, which is over and above the current financial-reporting requirements. And third, taking a leaf from Japan, develop ‘deliberation councils’ where government officials, PSE management, and private-sector business leaders periodically exchange information over seminars or conferences in the presence of third-party observers from the academia and the media.
The world has moved seventeen years into the 21st century; there is no reason why Pakistan must remain tangled in the century past. Keeping PSEs in their current shape and form is forcing Pakistan to run backwards. Like his predecessor, does PM Abbasi also want to command over Pakistan’s backward march?
