Institutional failure has been the hallmark of Pakistan's history. Much has been written and debated. This article will not dwell on the well-treaded past. It will focus on some current and recent issues. We all know about PIA, Pakistan Steel Mills, Railways, etc. It is estimated that almost 100 institutions of the federal government are obsolete, irrelevant or redundant. It costs the taxpayer Rs 1.5 trillion per year to keep these sick enterprises afloat. The Defense Budget is only Rs 1.2 trillion. The reader can draw his or her own conclusions.
One of the great culprits of institutional failure in the financial sector has been the State Bank. Banking failures and meltdowns have occurred with regular frequency. Mehran Bank, Indus Bank, The Bank of Punjab, all the major DFIs (NDFC, Bankers Equity, PICIC, IDBP). Now Summit Bank is headed in that direction (soon to be merged with the Sindh Bank). This was the original strategy devised by the gentleman who is currently under detention. Yet the State Bank never took preemptive action. Or post-failure action. Most Governors of the State Bank have been 'Yes' men, appointed especially for this quality. Unless the State Bank gets pro-active nothing good can happen. So too for SECP, CCP, Ogra, Pemra, etc.
There is another recent example of Project Failure - The Textile City. This project was conceived by the Musharraf government. It was designed to take Pakistan's textile industry to the next level. The Board of Directors comprised great stalwarts of the MNC sector. Highly paid professionals were hired. The project dragged on, from one obstacle to another. The management team kept changing. CEOs came and went - great salary packages. Yet nothing was achieved. Last year the project was marked for liquidation. Billions of taxpayers' money was wasted. Perhaps the Chief Justice of the Supreme Court can constitute a JIT to find out how much money was siphoned-off, and by whom.
An imposing building in Clifton houses the Federation of Pakistan Chambers of Commerce and Industry (FPCCI). This apex body has achieved nothing in the 20 years I have tracked it. It only does internecine politics. It contributes nothing to Pakistan's industry or trade. Only functions for VVIPs and photo ops. This is a United Group, a Businessmen Group, etc. Recently I was sitting next to a 'kingmaker' at FPCCI. It was a rather boring function. Two junior members of FPCCI sub-committee came over and started complaining to him. The 'kingmaker' pointed upwards and stated, "I have important connections at the top". I wonder whether he was referring to Nawaz Sharif, the (then PM) or the celestial powers. Most trade bodies in Pakistan are failures - notable exceptions being the OICCI and the PBC. My old organization, the Management Association of Pakistan, was a heavyweight in the profession of management. I departed in 2009. Currently one of the recent past Presidents was in the Karachi central jail, accused of some dealings with Sharjeel Memon.
Here is an account of a rare German failure. Germany is one of the four 'master races' of the world. In the last 12 years, Germany has held the EU together with their leadership, statesmanship and surplus capital. German products are unmatched - Porsche, Audi, etc. It is very, very infrequently that one encounters a German failure. Some years ago, the Pak-German trade body converted to the Pak-German Chamber of Commerce. The idea was to upgrade the status of the older body and bring in more technology and investment. A CEO was being sought for new body. I was interviewed for the post by some top German brass at the Karachi German consulate. Nothing happened. I moved on (I was never seriously interested) but I wished the project well, as it was important for Pakistan. Eventually a foreign German speaking lady was appointed as CEO at a fabulous salary. Once she came for lunch with me at my club. After a few pointed questions I came to the conclusion that she would not be able to contribute much to the new organization as she did not know much about Pakistan and its commercial and industrial needs. Also, she had no network, so essential for success of a new organization. Later I heard rumors about fake degrees, legal cases etc. The bottom line is that the Pak-German Chamber made absolutely no professional impact. If any senior official in Berlin reads this he may enquire into this rare German failure.
(The writer is the former Executive Director of the Management Association of Pakistan)
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