EDITORIAL: The Board of Directors (BoD) of the Pakistan Steel Mills (PSM) is either reading too much into recent headlines or it understands that the situation is so bad that murmurs in the press about the government finally shutting it down for good might really be true this time.
Either way, the Board has clearly been jolted enough to reach out to both the SIFC (Special Investment Facilitation Council) and the prime minister’s office, strongly opposing “complete closure” as “ill advised”.
This issue, and the bigger financial black hole that most SOEs (State-Owned Enterprises) have become, is as old as time in this country. But now things are really so bad that this haemorrhaging will simply have to stop; not least to stay on the IMF programme and unlock its later tranches. It is, therefore, troubling, that even as PSM advocates a “comprehensive liability settlement exercise” – and then getting on with business as usual – and the government seems to be sharpening the axe, there’s no serious debate about privatisation.
That those speaking for SOEs, and benefitting from the trillions the government sinks into them every year, would be inherently biased against such a course of action is only natural, and quite understandable. Yet, once again, there’s nothing left in the kitty to fund their expensive life-support any longer; and it would not have been wise to do so even if there was a little more money to burn in the reserves.
It’s shocking that the country’s decision-makers have still not realised that they have neither the money nor the time to keep juggling the same options over and over again.
For the sake of national interest, they must do what is needed to proceed with privatisation of all sick SOEs and slowly remove this tumor from the national economy. Unfortunately, even before specialists and experts can sit down for extremely complicated calculations, there will be political hurdles to overcome in a cabinet badly split on the issue.
Let’s remember that this coalition government tried to look strong coming out of a disputed election by claiming that it understood the gravity of the economic collapse and therefore was the only administration capable of “doing whatever it takes” to get the economy up and running again. Surely, it would have understood that everything hinged on another IMF bailout, and SOEs were going to be a central part of the wider debate and, of course, one of the biggest problems in the economy.
Yet here we stand, wasting more resources and still getting nowhere. The government must indeed engage all stakeholders, as PSM has rightly demanded. But the agenda should be identifying points of convergence, followed by a process of give-and-take so all parties can find common ground for privatisation. Then this process should be extended to other loss-makers.
This debate, and the burden on the economy (read honest taxpayers), has gone on long enough. The government cannot kick this can any further down the road. If it does not get its act together even now, the whole house of cards will collapse, and it will go down in history as the administration that did not do what would still have given the economy one last fighting chance.
Copyright Business Recorder, 2024
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