Steel Mills, for example
Not many people at the helm now would scoff at former PM Shaukat Aziz’s smart idea about the Steel Mills. Back then, not so long ago when he was finance minister, Aziz advocated getting rid of the Mills, even at the token price of one rupee. Being a market guy who’d earned his stripes up and down the finance capitals of the world, he could see that the gangrene had spread too deep for treatment, even amputation, to help. The Steel Mills, just like other Public Sector Enterprises (PSEs) – that were supposed to earn the state billions but were instead haemorrhaging hundreds of billions – had to be got rid of; that was his point.
Now, with their liabilities having climbed much higher, the government is, once again, considering some sort of economic wizardry to dump the Mills’ losses onto a private party, even if partially. Sadly, though, while spin can be employed quite successfully in political speeches and election rallies, it is not quite as persuasive in business transactions. These initiatives lack the simplest economic/finance sense, yet the government pursues them, and sells them as novel. Just the gas bill for the Mills, to give one example, stands at Rs40 billion. There are numerous others, of course. Any party that takes up such entities cannot have Ivy League decision makers, to say the least.
In the debate, and the numbers, the fact that this phenomenon is a gift of our particular brand of democracy is often overlooked. The dictators were hardly trend setters for scrupulous appointments, granted, but the way all of our democratic leaders stuffed state enterprises with political appointees is the stuff of legend. The family silver, which was – at the risk of repetition – supposed to be the bulk earner, runs into several hundred billion in losses every year. One former head of OGDCL, for example, had hardly completed school but was appointed the position because he was the then sitting prime minister’s bunkie in prison back in the day. Perhaps the government should invent some other magic trick to deal with the PSEs.
