- The PIA example
Prime Minister Khaqan Abbasi, no stranger to PIA or the airline industry, would have understood how signing off on the Rs13.6 billion bailout package for the national carrier only amounted to kicking the can down the road. Sooner rather than later, he – or whoever is prime minister at the time – will head a similar ECC meeting and throw more good money after bad just to keep PIA afloat for a little longer. Since this, like previous packages, is a desperate patch-up job, it will not make way for any structural overhaul of the airline, whose expenses will continue to be twice as much as its earning.
The rationale behind keeping large public sector enterprises (PSEs) in a largely open economy was, in addition to providing basic service delivery to the people of course, to generate revenue for the exchequer. That ours continue to hemorrhage hundreds of billions of rupees every year is no longer even surprising. That no government has been able to do something about it is. Any talk of privatisation will always be a textbook non-starter. The government might not have a choice with this perpetually bad investment, but no party in its right mind would pick anything so bloated with political appointees and so run into the ground off the shelf.
The only doable solution is, unfortunately, long term. Yet even rejecting the proper solution and resorting to patch up has become a long term enough phenomenon. An economy with a low production base, uncompetitive exports and one of the lowest tax-to-GDP ratios in the world, not to mention the mountain of debt both internal and external, can just not afford such white elephants. Eventually it is the people not the politicians that have to bear the financial burden. So far no leader, democrat or dictator, has been able to help the people on this count.
