Conflicts of interest

Having a person who has bought a company from govt on a board that has final say on sale of companies is problematic.

There is a reason why even the strongest proponents of economic liberalisation and privatisation have a problem with the PML-N’s approach to the process: the Nawaz Administration takes almost no efforts to guard against real or perceived conflicts of interest, leading far too many to believe that the game is rigged in advance. The composition of the Privatisation Commission board is highly problematic and will likely subject the government to allegations of corruption. One of the members, for instance, is a beneficiary of privatisation, having bought a formerly state-owned company in the past. There is nothing wrong in buying a company from the government if the process is a fair one, but having such a person on the board that will have final approval on who buys which company and for what price is highly problematic. Even if he or his business associates do not plan on bidding for companies on the list, the appearance of a possible conflict of interest is too high and will taint the process.

There are potential conflicts of interest affecting many other members as well, which suggests that public perception is not something that the Nawaz Administration thought much about before setting up the board. We understand the government’s dilemma. Many times, the same reasons that give rise to potential conflicts of interest are also the same reasons that would make a person a good candidate for the job. Somebody who has bought privatised companies, for example, likely knows what it takes to successfully turn around a previously state-owned asset. But given widespread opposition to the idea of privatisation in the country, if the government wants to continue with this process, it needs to pay attention to public perception. Not only must the process be free and transparent, but it must also be seen to be as such by the wider public. Otherwise, we may well end up with more court cases and more investors fleeing the country, the exact opposite of what the administration hopes to achieve.

Published in The Express Tribune, January 16^th, 2014.

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