There has been a slight reduction in losses of government institutions, but they are burdened by inefficiency. Privatization is the ultimate solution, but there is no possibility of its implementation in the near future. Experts
Monday, January 20, 2025
ISLAMABAD (News International- 20th January, 2025) Pakistan’s public sector enterprises have seen a slight decline in losses, but they remain burdened by inefficiency. Urgent reforms, strategic leadership and privatization efforts are needed for sustainable performance. The biennial report on federal state-owned enterprises, recently published by the Ministry of Finance, has revealed a significant picture of the performance of public sector enterprises so far.
According to the report, during the first half of FY24, 15 government entities were responsible for 99.3 percent of the sector’s total losses, which were Rs 405.86 billion, while other government entities recorded relatively modest losses of Rs 2.812 billion, highlighting the continued failures and operational challenges of these entities. Despite these disturbing figures, the report indicates a 9.72 percent decline in total losses of government entities compared to the same period last year when losses were Rs 452.686 billion. However, the long-term outlook is bleak. Total losses have reached Rs 5.9 trillion since 2014.
Speaking to Wealth Pak, Dr. Nasir Iqbal, Head of the Macro Policy Lab at the Pakistan Institute of Development Economics, Government Institutions, acknowledged the deep-rooted nature of these shortcomings. He said that it is almost impossible to solve these problems in the short term but urgent steps are needed to prevent further losses. He said that the government should stop new recruitments in government institutions and make a diversion plan for existing employees, possibly reallocating them to other ministries to reduce the burden.
He stressed that privatization is the ultimate solution but admitted that there is no possibility of its implementation in the near future. He stressed the importance of practical, short-term measures that include employment adjustments and reform measures. Adding to this context, Muhammad Armaghan, Senior Researcher at the Federation of Pakistan Chambers of Commerce and Industry, highlighted that the problems go beyond structural shortcomings and are deeply rooted in the behavioral flaws of the leadership of government institutions.
He said that while some government institutions perform well and contribute positively to the economy, their success is overshadowed by the poor performance of others, which tarnishes the collective reputation of these institutions. He argued for visionary leadership that prioritizes accountability and strategic planning. He proposed appointing leaders on merit while removing inefficiencies through bold measures such as terminating underperforming staff or hiring young, dynamic professionals on contract terms.
He said that these measures will bring innovation and efficiency to stagnant organizations. While financial assistance has alleviated some immediate challenges, persistent losses show that ad hoc measures alone cannot solve systemic problems as long-term solutions lie in privatization and reforms. Leadership and accountability should be prioritized as bold measures can help revive these enterprises and reduce their burden on the national exchequer.
Comments
Post a Comment