This is apropos an ongoing series of articles titled "Reforming SOEs in Pakistan" by Dr Omer Javed in Business Recorder. The writer has thrown ample light on the economic challenges constituted SOEs (state-owned enterprises or public sector companies (PSCs) in the case of Pakistan). His is a highly informed perspective. What is, however, missing in his articulation is perhaps the most critical aspect in relation to SOEs: job creation. We all know that all SOEs over a period of time have become employment bureaus; these entities have been hiring more and more people in the absence of a higher level of productivity. I, however, fully endorse his view that "In Pakistan, there are around 170 SOEs (or PSCs) and it is important that government's committee on reforming SOEs should provide an ownership rationale for each of those SOEs, including in the exercise, reasons as to why the market could or should not provide the same goods and services in the case of each SOE. This latter exercise will also allow better identify how much, and if at all, a certain SOE should be opened for private participation."
It is important to note that the highest incidence of Non-Performing Loans (NPLs) in China is associated with its thousands of SOEs. But Beijing has been able to bear this burden because of its sustained export-led phenomenal growth.
Copyright Business Recorder, 2019
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