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Wednesday July 06, 2022

Do not repeat past mistakes

May 26, 2022

LAHORE: Our leadership would have to show the same political will as exhibited by politicians of our neighbouring economies that ran transparently. Even democracies fail if the countries do not manage their economies transparently.

In fact, even in non-democratic regimes only those flourish where prudent economic principles are not violated. Among the democracies near us is India that is politically united on economic front and among the autocratic regimes we see China moving ahead as its leadership let the economy operate in a way that it provides level playing field to all.

Every country in this region is making best efforts to reduce the state’s role in operating businesses. The government has got no business in doing business.

It should privatise the public sector companies immediately. Circular debt will always stay if radical changes in power sector are not instituted.

When 20 percent of the furnace oil meant for power generation in state owned power generators is stolen you make sure that circular debt grows. When theft remains high and power bills are not collected from influential you can only add to the circular debt.

Some public sector power companies are operating at 18-20 percent efficiency. Change of management and change of ownership from public to private is the only solution to resolve this menace. Moreover, the government should not expect the private sector to retain unproductive workforce of these entities. They would have to be separated.

Similarly, PIA would continue to post losses unless its management is not revamped. He said government would have to think out of the box to take the country out of mess.

Muslim Commercial Bank was earning Rs150 million per year when it was privatised in 1990s. Today it pays over 12 billion income tax to the government.

The same stands true for other privatised banks. After initial success of privatisation in early 90s, vested interests in the concerned ministries started creating hurdles in privatisation.

To avoid the pressure, the government must transfer control of all public sector companies to a holding company for privatisation as successfully done in many countries. The ministries or government functionaries should have no influence over that company.

Government has realised that rental power and furnace oil-based generation would not resolve power shortages. We must bear with these power generators till the sovereign guarantee to buy power from them expires.

In the meantime, the state must look for alternate energy sources. These include solar energy, municipal waste energy potential, and energy that could be produced from agricultural waste.

These energy resources do not require imported fuel. Water is another resource, but it requires huge amount and several years to produce the first kilowatt.

State must act boldly and fairly to manage the economy transparently. If we continue managing the economy the way we have been managing in the past seven decades, the quality of life of our next generation would be much inferior to what we are enjoying now.

The government must reveal the names to tax evaders, tax cheaters. It is time to expose the parasites destroying our economic structure. The government must take difficult decisions to enlarge the tax base. All foreign aid should be refused if it comes with strings attached and hurts our self-respect.

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