The problem statement

As somebody wise once said, albeit I am not sure who, "If a problem does not have a solution, it is not a problem, it is a hard fact of life".

The thing about hard facts of life is that you cannot do much about them, except lay back and enjoy. Albeit the quicker you determine whether a situation is a problem or a fact of life, the quicker you can move on. The time wasted finding solutions for something which has no solution, an impossible task, can be better utilized banging your head against a real problem.

Except, even after it has been determined that there indeed is a problem, the job is not done. Problems can be simple or complex, some problems can have associated sub-problem, and more importantly half-baked solutions to problems can result in more complicated problems, which keep growing and rotting for years and years with no end. So unless a problem is clearly understood, the solutions can be all over the place resulting in more problems. In fact if a problem persists long enough, it becomes a fact of life.

All of the above, highlights the importance of the problem statement and the need to have one for every problem.

"A problem statement is a clear concise description of the issue(s) that need(s) to be addressed by a problem solving team. It is used to center and focus the team at the beginning, keep the team on track during the effort, and is used to validate that the effort delivered an outcome that solves the problem statement", www.ceptara.com › blog › how-to-write-problem-statement.

In Pakistan's history of problem solving, to venture a guess, if we have been bad at one thing, again and again, it is our ability to articulate the problem statement.

As an example, take the case of the national airline.

PIA, was last profitable in 2004, if Wikipedia is right. Almost 15 years later we still have not solved that problem. The bigger worry is that if PIA is the benchmark of our problem solving ability, we probably need multiple decades to solve bigger problems, like the Pakistan Railways.

So what is the PIA problem?

Before we even get to the problem or fact determination, we are undecided about the most basic decision relating to the PIA problem; should Pakistan have a national airline in the first place, or not. Unless this riddle is solved, we cannot move forward. Why? Well simply, if the answer is no, we immediately shut down PIA to plug the leak and think about selling it later. Conversely if it is a yes, all dillydallying over privatizing PIA is out the window and we can get to the problem statement immediately.

But ignoring the basics, where are we currently with the PIA problem?

That PIA is overstaffed with political appointees which are the reason for its huge losses is the most popular problem statement floating around. But if Wikipedia is indeed correct, PIA had over 6000 more employees in 2004, the last time it was profitable, compared with 2018. Even ignoring this, let's get the equation right. With the problem identified and the solution therefore pretty much straightforward, the government, which has a license for violence, if not a license to kill, could not terminate the services of 6000 surplus employees in more than 15 years.

The alternate solution is privatization, which again is very popular. But let's be very clear, any foreign investor will at a minimum not assume the approximately Rupees 400 billion debt that PIA is burdened with, and will also not adopt the surplus 6000 employees. Accordingly, the Government will have to foot the bill for and implement a very pricey golden handshake for these surplus employees. But if the government could not do it in 15 years, how will it accomplish this in 6 months; and if the government can do it, why not simply fire these 6000 employees and make PIA profitable and forget about privatizing.

We love everything circular don't we?!

Nonetheless let me give you an auditor's tip; if an entity is worried about cost cutting, than the business model is already in trouble. Costs give the stakeholders sleepless nights when revenues stop growing; so what happened to PIA's revenues. In a nutshell, PIA was never equipped to, and perhaps still cannot, without protectionism, compete with the richer, state sponsored gulf airlines, all of whom, over time, systematically snatched PIA's market share in PIA's home market, while Nero played the fiddle. So is closing the skies the solution; sure if you want all your workers evicted from the Middle East and want your workers' remittances to drop to a pittance!

Undoubtedly, PIA's problem statement is not clear and concise; and hence there cannot be a correct solution.

And that is the tip of the iceberg.

The bigger problem is that the economy is a problem. And how do you go around developing a problem statement for the economy, when you have not successfully developed a problem statement for PIA even after 15 years; which is a very small component of the overall economy.

The topic today cannot be condensed into one article, so perhaps there will be a second part. However, what should be clear form the above till now, is that the challenges that Pakistan faces on the economic front are complex, and the very first step is precisely and accurately developing, in all cases, beyond the simplistic "Houston we have a problem", the problem statement.

(The writer is a chartered accountant based in Islamabad. Email: [email protected])