Public sector – the reality check

It can help turn around economy if equipped with required governance structure

KARACHI:

I had always spent a highly busy professional life till 2019, when I, while still technically employed, suddenly found myself having ample time at hand.

Of course, having negligible experience of the public sector, I was not aware of the shenanigans which lie lurking in its corridors for independent-spirited professionals. I expected that someone in the power corridors would intervene and put some sense into the ridiculous situation and me back to work. But, alas, that was not to be.

Finding all attempts thwarted, as an alternative medium of self-expression, I discovered researching and writing on the issues afflicting the economy.

PIDE’s report on civil services

In the above pursuit, I discovered Pakistan Institute of Development Economics (PIDE). Its recent report on civil service is simply world class.

It basically highlights the chaos in the pertaining remuneration regime and lack of a comprehensive performance-based regime despite 29 commissions and committees having been formed for the purpose in the past 74 years.

It also informs us that compensation packages of civil servants are significantly more than the private industry.

It could further help if the report would also have presented a comparison of contribution to the economy of a private sector employee versus a civil servant.

All the parameters with respect to industry, agriculture, law and order, energy, PSEs, circular debt, agriculture, FDI, science and education, population explosion, etc leave nothing to imagination in this regard, though.

The salient governance indicators provided by the World Bank further complement the observation.

For example, Pakistan’s percentile ranks on government effectiveness, regulatory quality, rule of law and control of corruption are 31.73, 24.04, 25.48 and 22.12 respectively while the same for India are 66.83, 47.60, 54.33 and 46.63 and for Norway they are 98.56, 95.67, 99.52 and 97.60.

Leaving aside the remuneration part, in my view, the salient highlights of the report are as follows:

One, most of the reforms have so far dealt with cosmetic organisational restructuring, adjustment of pay scales, etc while ignoring critical issues such as integration of specialists and professionals into the administrative services, though the Cornelius Commission had recommended that in 1962.

Two, the required skills are scarce because of the lack of necessary focus. Similarly, the promotion and placement policy is not primarily performance-oriented. Instead, the system is geared to maintain the status quo for the “present system of patronage and power” as the authors have aptly described.

What else can better describe the system than the observation, the study shares, of an American professor, who served as a public administration consultant to Pakistan’s government in 1957.

It states that “the technical judgement of mature and well-qualified technical personnel was generally subjected to modification by junior secretariat officers of very limited maturity and experience”. Unfortunately, things have only worsened with time.

PIDE may consider developing part two of the study while keeping in view the observations and suggestions made below.

Firstly, instead of reduction of the lower staff only, an overall reduction in the backdrop of the 18th Amendment and the consequential devolution to provinces may be reviewed.

Secondly, the report seems treating the PSEs’ board positions in the category of perks. They are instead responsibilities. Almost invariably, the controlling ministry officials have strong presence in every board, which severely compromises boards’ independence.

Also, even the independent directors being selected by the ministry mostly fail to demonstrate any independence, further jeopardising merit and creativity. The root cause of the entire issue is of course lack of required professional capacity.

For example, a comparison of a few multinational energy PSEs with some in Pakistan highlights that out of 59 directors of six such MNCs (PetroChina, Equinor, etc), more than 40 have extensive relevant high-level experience.

In the Pakistani sample, out of 90 directors, less than 10 had the relevant experience. No wonder that in Pakistan, though PIA’s, PSM’s and PR’s galore, there are no success stories.

Still, the given mal-performance remains mostly unnoticed. I am aware of instances where it resulted in losses of billions, eg avoidance of an independent audit. This could never happen if there were awareness of the value leakage involved and the responsibilities a board position entails.

In the given genre of boardrooms, the entire discourse generally remains too mediocre, evasive of real issues and sometimes even permeated with suffocating conspiratorial overtones.

If I own an airplane that doesn’t mean that I should start flying it myself. Operating the boards is a professionals’ job and should be left to professionals alone. Therefore, a controlling ministry may focus on instituting a transparent process for constituting professional boards instead of the current practice of direct presence.

Thirdly, absence of any professional tier/board at the top steering the entire economy or professional teams driving each sector separately is another anomaly.

We occasionally observe some attempts to fill this gap, which mostly fail because of either not giving the professionals due primacy or ending up selecting weak professionals. The case in point is the recent advertisement for a technical adviser by the energy ministry.

As per the advertisement, the position is reporting simultaneously to the secretary and the minister, both. This in conjunction with a bit hazy criteria may prove to be a non-starter.

In order to achieve better results from the exercise, a more objective criteria targeting quantifiable experience, along with its quality, of planning and execution and corporate leadership may help more.

In this regard, consulting a professional outfit, such as Hay, for preparing the criteria may prove useful.

Instead of one professional, we need a complete institution of high-profile professionals at the top with well-defined responsibilities and goals. Also making any such team report to a bureaucrat may only limit its delivery.

PIDE may research on more viable governance systems and recommend solutions accordingly.

The writer is a petroleum engineer and an oil and gas management professional

 

Published in The Express Tribune, December 27^th, 2021.

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