And again PIA requests bailout assistance, and again the cabinet committee on restructuring cites failure to incorporate appropriate management changes for dismissal, with a repeat performance scheduled for the next meeting. While the committee is right in stressing the recommended restructuring, it is reminded that the problem is much more deep-seeded than the flag carrier, and failing a comprehensive strategy encompassing all loss-making public sector enterprises, such episodes will recur endlessly.
As we have repeatedly noted during debates involving our panel of experts, arguably the most prudent way forward is the holding company initiative, one mandated with incorporating private sector expertise to engineer restructuring and strategic privatisation of all sick enterprises. While this idea seems to have found weight in official circles, it needs to be broad-based and all encompassing.
The economy stands at a point where further unnecessary public leakages will seriously undermine the government’s limited fiscal space, making the growth turnaround virtually impossible. The present situation demands targeted expansionary fiscal injections from the finance ministry, necessary to complement the sudden shift in monetary policy. But such essential policy options are seriously compromised so long as the centre remains paralysed due to hemorrhaging institutions. The problem is made worse since most public companies have long been used for political leverage by successive governments, their ranks filled with incompetent political appointees.
The current policy mix seems paradoxical when recent steps to stimulate investment and subsequently employment are not supplemented by checking bottlenecks that retard productive enterprise. PIA is but one part of a much larger problem. Fortunately, the solution is comprehensive, and one strategy fits all elements of the problem. Restructuring and ensuring strategic sale of PIA and all other losing entities is the only way to fly right.
