ACCOUNTABILITY CRISES IN PUBLIC SECTOR

By Aurangzeb Soharwardi-2010

Now a days ,our beloved Pakistan has been turned around in to CRISISTAN by mis governance, corruption and political exploitations .We have so many external threats and challenges to face along with countering terrorism and political blood shed ,internally. Economy is dipping down, law and order is in shambles and  there is unprecedented inflation.  Besides this crises situation There has been an up roar of strong criticism regarding the performance of State Owned Enterprises in the country. Although managing  (SOEs) has always been a contentious issue in Pakistan , since its inception, how ever the recent past has been replete with serious concerns about planned mis governance and patronized corruption in SOEs. Intricately  entangled web of nepotism, political interferences, vested interests has given abrupt rise to inefficiencies and non productivity. Considering the inherent importance of this function it can logically be assumed that there has been a lot of  debate on the causes behind these inefficiencies and it is therefore extremely disturbing to note that a final solution has neither been identified nor implemented, not at least in Pakistan. Resultantly poor performance, Commercial non viability and circular debt burden provides an opportunity to the Government to announce privatization of these national assets. It has also been point of strong debate that since government should not involve it self in doing business and other commercial activities there fore all SOEs should be in private sector for efficient operations. Since its birth in 1991, the Privatization Commission has so far privatized 167 State Owned Entities (SOEs) for US $ 9 billion proceeds, which were remitted to the government. Currently 58 SOEs approved by the Council of Common Interest (CCI) were on the Privatization Program while 23 SOEs were being undertaken on fast track basis. The purpose of privatization was to liberalize the economy, to make the entities efficient, increase their capacity and production and to make them profitable by involving private sector. The major single largest transaction i.e. Pakistan Telecommunication Company Limited (PTCL) ‘s 26 % shares were privatized with transfer of management control in 2006. This whole situation calls for a serious analysis as to why public sector is synonymous with inefficiency. What are those reasons due to which SOEs become white elephants instead becoming profit earning  and efficient public service entities .Besides other factors ,the main reason comes out to be Lack of political, public , administrative and organizational accountability. Accountability is one of the most important component of all the religious, state and community frame works. As an anecdotal saying goes, about being accountable. SOEs in Pakistan severely lack accountability mechanism, which is The act of being accountable to the stakeholders of an organization, including shareholders, employees, suppliers, customers, the local community, and even the particular country(s) that the firm operates in. In most jurisdictions, a body of corporate law has been developed in order to formalize these requirements, but without proper implentation it is like a rusty sword. By definition, accountability is being answerable or responsible for something. Holding people accountable is really about the distribution of power and choice. When people have more choice, they are more responsible. When they become more responsible, they can have more freedom. When they are more accountable, they understand their purpose and role within the organization and are committed to making things happen. Organizational accountability, the timely and consequential pursuit of mission goals, is driven by the ability of the organization to quantifiable measure earned rewards and the culturally determined method of assessing and recognizing employee performance. When employees make clear and specific commitments for their own work, entire organizations become aligned and achieve specific measurable results. So what went drastically wrong with SOEs in Pakistan? In the recent past, The sharpest and longest nail in the coffin was hammered by placing incompetent , ill reputed friends and allies in the top slots of all the public enterprises, like WAPDA, NICL, Steel Mill, PIA, PEPCO, Sui Gas, National Bank, Railways etc,  as ministers, ministers of state ,MDs and chairmen. And those few, who were considered competent, are also concentrating their abilities on money grabbing to take best possible advantage of the situation. This worst practice of nepotism and commercial bargaining, with commissions and kick backs for appointments on these lucrative posts has serious repercussions .The people coming from back channels, bring the teams of their  favorites along with them to run the affairs of these SOEs, with no National loyalty, vision, modern strategic planning and contemporary management  practices. They have their political and economic agendas to pursue within shortest possible time , show allegiance  and look after the interests of  their appointing authorities before fleeing with their bags full. Well connected, labor union sponsored, politically affiliated people with questionable integrity and competence are at the helm of affairs in almost all the organizations. Honest officials with strong character, sound professional knowledge and experience have been cornered to become frustrated , burning their blood after seeing the fate of these precious assets of the nation. This unjust situation has its negative trickle down effects, creating a scenario of Apathy, dis contentment, rumors, conspiracies , uncertainty , professional deprivation and massive corruption. It is an open secret that in all the public sector organizations , nothing can move without bribe, a fact which has been accepted and adopted by all politicians, administrators and the public too as a routine activity. This massive corruption has disrupted the process of resource allocation, utilization, productivity and development. In most of the organizations ,only day to day support activities are being performed or bulk purchases from where ,there are some chances of commissions coming directly in the pockets of people involved. .No operations and maintenance activities are taking place. Training and motivation of employees is not even in the agenda list of  higher ups. The dilapidated condition of Railways, Steel Mill, PEPCO and PIA, particularly, is in front of the nation. The national flag carrier PIA has been made to fly with its wings broken due to massive mal practices. Besides billions of rupees losses. A recent scam worth RS/150 million has been unearthed by media. Since the political, administrative and public accountability are inter linked, the lack of these has damaged the institutional frame work, increasing the country’s domestic debt by $7.8 billion, in the first nine months of the last fiscal year, pushing it up to $5.5 trillion in total. In 2010-11, Pakistan’s trade deficit was recorded at $15.587 billion. Government has borrowed RS/28.64 billion during first 23 days of the current fiscal year from commercial banks. The stock of government borrowing from central bank stood at RS/1.239 trillion by end-june 2011.The menace of circular debt got hefty as much as RS/ 780 billions in 2010 and  is yet to be sorted out on permanent basis, distorting the whole economic and operational cycle and pricking the economy. Steel mill RS 22 billion financial embezzlement is the example of massive organized crime. News about huge kick backs in rental power plants are still in the corridors. While NICL scam of RS/5 billion is still being investigated,yet an extraordinary development has surfaced that NICL has asked FIA to recover another RS/5 Billion for Karachi Korangi Land. According to press reports Railways has accumulated RS/52.5 Billion staggering deficit due to mis management. Government has announced a RS/10.1 Billion breather for this cash starved and mis governed organizations which it self is worth  trillions of rupees. National bank, giving huge loans and writing them off  is one more  example of organized and legalized corruption. In the absence of effective accountability ,these gigantic financial embezzlement are beside the routine inefficiencies and mis governance , wasting colossal amount of resources. It is high time now that the parliament ,the public ,The judiciary and the executives must contemplate to revive the culture of accountability at all levels. Transparent and just accountability system must be operational for all the state owned enterprises. Honest, patriotic and thorough professional people must be appointed as heads of SOEs and fully supported to introduce reforms to turn around these white elephants in to progressive modern organizations. A pragmatic and vibrant organizational accountability system must be activated in all the SOEs, which not only rewards the better performers , but also penalized the culprits. Performance targets must be given at all levels and employees to be motivated to meet them within specified time . Efforts should also be made to embellish the distorted image of these organizations.  In efficient management of SOEs is causing a great damage to the economy.These organizations worth trillions of rupees are national assets which can play effective role in national development. Millions of people and their families are associated with these SOEs to earn their livelihood. These  SOEs must be revamped and  safe guarded ,instead being mismanaged, looted and plundered. As public accountability, explained in its political, economic and administrative dimensions, is essential for maintaining public confidence in governance, it is imperative to strengthen the norms of it in the society too.

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