How would taxpayers feel after reading the headline in this newspaper: 'Losses of 15 SOEs surge to whopping Rs5.9 trillion'. We had heard of a ‘billion’ with apprehension, but here we had to reconcile with trillions that state-owned organisations pillaged from the nation. And more surprising was another headline the next day: 'Govt spent Rs616bn to bail out cash-strapped SOEs in first half of FY25'. What’s the wisdom behind operating and maintaining such heavy loss-making organisations?
The prime minister belongs to a business family of the private sector. Would he tolerate if one of his organisations was constantly going into a loss? Everyone knew that the state-owned enterprises were rolling in losses, and the government wanted to privatise them. What happened? People know that the government is run entirely by the rich or is beholden to them. The bureaucracy is massive and expanding. Governments hesitate to interfere with it.
The bureaucracy also dominates the public-sector organisations. For instance, the dilly-dallying in the case of the privatisation of PIA and its hotel in the prime location in New York is obvious. Some of us have greyed during the process of its privatisation, but the airline continues to make news. Every time the date of final parting approaches, someone plays a sleight of hand and the airline’s privatisation is postponed. Once again, the news of privatising the airline has been announced within 90 days, but it doesn’t mention the date.
The most recent, however, are the SOEs, which mainly comprise DISCOs, creating a name for themselves in loss-making ventures. Reading the list is intriguing. These organisations have been going at a loss for many years, but no son of the soil in the government cared to change their course from loss-making to profit-earning. Recall that some of the DISCOs were established in the 1990s. Two Swiss companies, SGS and Cotecna, were given the contract to inspect the quality of the imported materials. That was the time when the public became aware of the sovereign guarantees. But that’s another story.
Why do public-sector manufacturing organisations run into losses regularly? There’s no secret. Besides relatively minor issues, the main problem these organisations face is overstaffing. The executives and lower staff are employed on high salaries and privileges, but without any tangible accountability. Merit is not considered strictly when hiring staff for these organisations. Many jobs are given on political recommendations.
Not to mention the industrial sector, even sports are not spared. How one wishes cricket as a sport had packed up from the poor country.
When public-sector organisations run into losses worth trillions of rupees, the prime minister plans to widen the tax base to provide relief to the poor. Creating business-friendly environments is his top priority, he claims. Of course, nobody would doubt his integrity and intentions to improve the condition of the poor, but how could his government ignore SOEs making a record-breaking loss of Rs5.9 trillion?
In fact, the government should refrain from setting up industrial and commercial organisations. Its primary duty is to maintain suitable conditions for the private industry to provide employment, grow and earn profit. We have examples of the same kind of industries in the public and private sectors. Those in the public sector are usually overstaffed, mismanaged and suffer losses while their counterparts in the private sector continue to prosper and expand. In the public interest, the government must privatise all loss-making organisations. The sooner the better.
The writer is a freelance columnist based in Lahore. He can be reached at: pinecity@gmail.com
