Time to Privatize Pakistan’s Sick State Owned Enterprises

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At a time when Pakistan’s economy remains in doldrums, and the IMF demands reforms, it is the opportune moment to privatize Pakistan’s sick and failing public sector enterprises, like the national flag carrier, Pakistan International Airlines (PIA).

 

Pakistan’s aviation industry has not yet recovered from repercussions of then aviation minister Ghulam Sarwar Khan’s remarks in the National Assembly in June 2020 that almost 40 percent of pilots in Pakistan have fake licences. While his words proved to be a distortion of facts but the PIA was dealt a near-mortal blow.

 

As an editorial in Dawn notes, “plans to restructure the national flag carrier have seen umpteenth aborted takeoffs. The government is looking to undertake what was a Herculean task even a decade ago, but which has become yet more onerous in recent years.” Not only is the PIA facing losses of PKR 635 billion by September 2023, it has numerous other troubles.

 

If the government really wants to transform things, then it should “set up a regulatory system in a professional manner, one that is manned by a competent, aviation-specific bureaucracy rather than individuals parachuted in from the air force or various government ministries. An independent, strong regulator — which is only concerned with safety regulations and the management of the airline — is critical to ensure that the operator is positioned to perform well.”

 

As an editorial in Dawn suggested instead of band-aid solutions “Pakistan could look towards the European Union Aviation Safety Agency: not only does it have very high standards, but it also has a fund to help developing countries set up their regulatory systems from top to bottom. It would be money well spent.”

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