Privatization, elimination of unnecessary institutions and 'right-sizing': What is the plan of the government of Pakistan to save billions of rupees?
Azam Khan
Position, BBC Urdu
51-year-old Muhammad Arshad has been working at a 'utility store' in Islamabad for the past two decades. Faiz Arshad, who holds the post of supervisor, had reached the store as usual last week when a news in the media made him feel unwell. This news was related to the permanent closure of utility stores.
Mohammad Arshad told the BBC that the news was heard on TV that the decision has been taken to close our institution within two weeks. The thought of children immediately came to my mind, what will happen to the education of the unemployed, how will I meet the expenses of the house in the era of inflation.
According to him, "We were surprised that we were not told anything about this and no opinion was taken and it was decided to close our 6,000 stores and send 14,000 employees home."
The employees of Utility Stores Corporation, including Mohammad Arshad, are protesting in Islamabad, the capital of the country, fearing to lose their jobs, but on the one hand, while many government employees, including Mohammad Arshad, are worried about the economic future, on the other hand, the federal government has this problem. The question is how to reduce the growing fiscal deficit.
For this reason, the government has made a plan called 'Right Sizing' under which various institutions can be privatized, unnecessary departments can be closed and the main goal of this process is to save billions of rupees.
According to the announcement issued after the meeting of the federal cabinet on Tuesday, 'in order to improve the efficiency of the federal government, correct use of manpower, eliminate unnecessary deadlock in policy making and implementation of decisions and strengthen only the most essential departments. Therefore, in the first phase, the implementation of the recommendations of the Right Sizing of the Federal Government Committee established for institutional reforms under the leadership of the Finance Minister has been started.
Earlier, while answering a question during the National Assembly session in June this year, Federal Minister for Privatization Abdul Aleem Khan said that the government intends to privatize 24 state-owned enterprises, including national airline PIA, Roosevelt. Hotels, First Woman Bank, Utility Stores Corporation and others are included.
However, this is not the first time that a government has undertaken reforms, so the important question is what are these reforms and will the federal government be able to reduce its size this time?
The BBC spoke to government ministers, political leaders and experts who learned that the plan is actually much bigger and if the government succeeds in its attempt this time around, many more ministries and departments will be axed.
A few days ago, the 'Right Sizing Committee' headed by Finance Minister Muhammad Aurangzeb briefed the Prime Minister on this project, after which the Prime Minister directed to send the matter to the Federal Cabinet for approval of this decision, but then the matter It could not be presented immediately before the federal cabinet. The reason for this was the government's coalition party, the Pakistan People's Party.
Before looking at the differences of the People's Party, do you know that this is the reform plan of the government?
What is the government's plan?
According to the announcement issued after the meeting of the federal cabinet, the first phase is to improve the efficiency of the federal government, correct use of manpower, eliminate unnecessary delays in policy making and implementation of decisions, and strengthen only the most essential departments. The implementation of the recommendations of the Right Sizing of the Federal Government Committee established for institutional reforms under the chairmanship of the Finance Minister has been started in 6 ministries.
According to the statement, the meeting was told that in the light of the recommendations of the committee, 82 government institutions of these ministries are being merged and dissolved into 40 institutions that include digitization, smart management, effective governance, transparent and fast implementation of projects. And better provision of facilities to the common man will be ensured.
According to the statement, the Federal Cabinet approved the recommendations of the committee and established the committee to ensure the protection of the interests of the employees expected to be affected by the merger and dissolution of the institutions.
Along with this, the federal cabinet also approved the continuation of the austerity campaign measures approved by the cabinet under the leadership of Prime Minister Shehbaz Sharif in the previous regime, including voluntary non-salary of cabinet members, essential vehicles, for example. Apart from ambulances, there is a ban on the purchase of government vehicles, a ban on the purchase of new equipment and machinery, the creation of new government posts, unnecessary travel abroad at government expense and a ban on treatment abroad.
On this occasion, the Prime Minister said that the country cannot afford that the bureaucrats and elites enjoy the taxes of the poor people.
Earlier, on the 16th of this month, in a meeting presided over by the Prime Minister, the Prime Minister was briefed by the Reforms Committee and informed about reforms in five federal ministries, including Kashmir Affairs and Gilgit-Baltistan, States and Frontier Regions, Information. Technology and Telecommunication, Industries and Production and National Health Services are included.
According to the press release issued by the Prime Minister House at that time, in the meeting, it was proposed to merge the Ministry of Kashmir Affairs and Gilgit-Baltistan into the State and Frontier Region, while 28 different departments in these five ministries should also be closed, privatized or These departments were proposed to be given to federal units. It was also suggested to strengthen 12 institutions within these ministries.
Along with the reform committee's proposal to eliminate 150,000 vacancies and outsource jobs like cleaning, janitorial, the plan includes phasing out various jobs from grades one to 16.
The government committee has also identified five ministries in the second phase from which the government will completely or partially get rid of. These ministries include Commerce, National Food Security, Science and Technology, Housing and Works and Board of Investment.
How much savings will be possible from this project?
Federal Minister for Maritime Affairs Qaiser Ahmad Sheikh is a part of the cabinet committee which is currently reviewing all the ministries, institutions and departments at the federal level to determine their future. BBC spoke to him in detail about the government's plan.
He told the BBC that "we will privatize such institutions of Pakistan which are not strategic or indispensable, or give them to public-private partnerships."
Most of the institutions have a lot of deficit and the people are not satisfied with their performance.
According to him, the government will get rid of all these institutions which are not important. There are very few institutions which are of strategic nature i.e. very indispensable for the country.
According to Qaiser Ahmed Sheikh, "We want the government to focus on 'good governance' and give performance." We are now considering which ministries and departments to eliminate.
He said that 'we will reduce the ministries so that the expenses are reduced.'
According to Qaiser Ahmad Sheikh, the cabinet is considering that new government jobs will be banned, purchase of new vehicles will be banned and everyone will travel in economy class.
According to Dr. Khaqan Najib, the former spokesperson of the Ministry of Finance, this saving will be in the form of the development budget, that is, if these ministries and departments are abolished, then the development budget will not have to be allocated for them.
According to Federal Minister Qaiser Ahmad Sheikh, at this time, the government has a total of 35 thousand billion rupees in the form of investment in these ministries and institutions, and in return for this investment, the government has to bear an average loss of 1 thousand billion rupees every year. is falling.'
According to Qaiser Ahmed Sheikh, the total debt of Pakistan is around 80 thousand billion rupees, then why should Pakistan pour its 35 thousand billion in a place where it has to calculate the loss instead of profit from investing. '
According to the Federal Minister, the matter does not stop here, after that we have to extend our hands to the IMF and other institutions and countries.
According to him, on the one hand, Pakistan is trying to get seven billion dollars from the IMF and is requesting debt relief and more loans from the partner countries, so it becomes more important that the economic stability of the country is further developed. can be put on the way.
It should be noted that Pakistan is requesting more moratorium on its loans from China, Saudi Arabia and the United Arab Emirates so that it can meet the conditions of the IMF and get seven billion dollars.
To a question, he said that Pakistan People's Party is our coalition party and we will take this process forward in consultation with them.
Qaiser Ahmad Sheikh said that all this will be possible only with the approval of the federal cabinet after political consensus. According to him, due to political constraints, this reform agenda could not go forward many times.
What are the objections of the People's Party on reforms?
Chaudhry Manzoor, a member of the reform committee formed by the government and a senior leader of the Pakistan People's Party, told the BBC that the People's Party has told the government that the fate of these 17 ministries should be determined before more ministries and departments are tampered with. to be decided which were to be transferred to the provinces after the 18th Amendment.
According to him, under the plan that the government has given now, all the ministries and their various departments have to be phased out.
It should be noted that in order to give autonomy to the provinces, the departments handed over by the federation to the provinces include education, health, agriculture, irrigation, environment, culture, energy, tourism, irrigation, sports, local government, human rights, food, excise. , including the Ministries and Departments of Revenue, Transport, Information Technology, Minerals and Illegal Immigrants.
Chaudhry Manzoor Ahmed said about the 'High Power Committee for Right Sizing' that there is one member from the People's Party and one member from the private sector while the rest are representatives of the PML-N.
Referring to Finance Minister Muhammad Aurangzeb and the government, he said that what they want to do is not acceptable in any case and he has prepared a detailed report and sent it to the Chairman of his party, Bilawal Bhutto.
According to Chaudhry Manzoor, the Finance Minister also wants changes in the Civil Service Act and wants to send many employees home.
According to him, at present, the department of utility stores is not asking for a single rupee from the government, but it is paying billions of rupees in taxes, but still it is being closed. The government is lying behind the government buildings and properties.
"These things are forgotten after speaking"
Political, constitutional and legal experts the BBC spoke to about the government's plan say the reforms should have happened 14 years ago when the country's parliament approved the 18th amendment to the constitution.
However, according to him, due to the strict conditions of the IMF and lack of money in the treasury, the government took this step, but it is important that it should not be seen as a political compromise like in the past.
Former Deputy Chairman of the Planning Commission and Vice-Chancellor of the Pakistan Institute of Development Economics, Dr. Nadeem-ul-Haq, told the BBC that, in his opinion, the biggest problem of the government is that it forgets after talking It still looks like the government will not be able to make these reforms.
According to Nadeem-ul-Haq, all those who reach the parliament want ministries and then distribute jobs on political grounds.
According to him, unless the unnecessarily recruited government employees are sent home, these reforms will not be of much benefit.
In his opinion, while it is very important to eliminate ministries, jobs are being given at the moment.
According to Nadeem-ul-Haq, according to a research of his organization, "one government servant spends two and a half crores of rupees and the cost of the employees above him increases much more."
According to him, there are currently 150 training academies in Islamabad, which have their own buildings and residences for employees.
In his opinion, it is unreasonable to increase the cost of work that can easily be done by universities. The establishment of such institutions is an excuse to share jobs.
According to Dr. Nadeemul Haq, the government gives a lot of money in the form of allowances. Electricity, house and petrol are given, but the economy of the country cannot afford all this.
Talking about the civil service, he said that 'bureaucrats are given a lot of staff, which is probably unprecedented anywhere in the world.'
"If the government's pocket is empty, reforms will be remembered"
Analyst Zafarullah Khan was very active in the eighteenth constitutional amendment process. He said that if the things contained in the 18th Amendment had been implemented 14 years ago, this time would not have been wasted.
He said that it was decided that the Higher Education Commission will now only look after the affairs of the universities located in Islamabad, while the provinces will have their own commissions, but then this did not happen and how many new recruitments were made during this period and resources were wasted.
According to him, "where some ministries were transferred to the provinces, then similar ministries were established with different names, like the Ministry of Labor was abolished, then Human Resources came to the fore, and the Ministry of Environment was abolished, then again." Ministry of Climate Change was created. When the Ministry of Health was abolished, then the same work was started in the name of National Health.
According to him, while the politics continued on Class IV jobs, a double injustice was done that the new National Finance Commission (NFC) award was not being given to the provinces. According to him, 'Now when the government's pocket was empty, then the idea of reforms came.'
According to Zafraullah Khan, the big problem at the moment is that the government is not doing all this on the basis of any vision but because of compulsion.
According to Zafarullah Khan, the federal government has to spend more on pension. Reforms in this sector are very necessary as till the third generation is taking pension from the public treasury.
According to him, when the government tried to reform the FBR, there was a strong reaction from there. In his opinion, "Our entire economy is running on a moratorium to repay foreign debts and the government is just wasting time."
Ahmed Bilal Mehboob of the Pakistan Institute of Legislative Development and Transparency (PLDAT) agrees that the decision on reforms should have been taken much earlier because "same institutions and ministries mean a burden on the national exchequer."
According to him, the way the finance minister is taking these reforms forward, he knows the pressure that is now on Pakistan. Referring to the IMF, he said that 'these reforms are being carried out on deaf ears.'
Commenting on the political differences regarding the reforms, he said that the People's Party is also against privatization but now these things have become 'out of fashion' i.e. irrelevant.
According to him, now the economy of Pakistan has reached the point, now the political parties have to change their point of view. According to him, information about the excessive recruitment of staff in government ministries and departments must also be taken.
As a result of this plan of the government, will any government employee leave the job?
At present there are 33 ministries at the federal level and each ministry has various divisions and departments, which also have lakhs of employees.
According to Federal Minister Qaiser Ahmad Sheikh, these employees "do not need to worry because they will either be offered a golden handshake or they will be accommodated elsewhere."
According to him, only one and a half lakh vacancies are being eliminated and the door of new jobs is being closed.
Dr. Najib, an expert in economic affairs, said that at the moment the government has no intention of sending employees home, but even if the ministries and departments are terminated, their employees will be put in the surplus pool.
"It is the discretion of the Establishment Division to depute them somewhere else or continue to pay them only salaries till retirement."
In response to a question, he said that "generally, golden handshake is not given to government employees."
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