State-owned enterprises (SOEs) will make or break the PML-N’s economic agenda. On June 5, Nawaz Sharif took oath of the prime ministerial office. That’s a total of 88 days. SOEs cannot be turned around in 88 days. At this stage, we could do one of the two things: try and determine if the initial direction is right and/or compare what was officially promised in the manifesto with performance on the ground.
SOEs manage to lose Rs500 billion a year. The PML-N is losing Rs1.5 billion a day every day of the year. Over the past 88 days, the PML-N has already lost a wholesome Rs122 billion.
The PML-N’s manifesto had a total of 21,988 words and the word ‘enterprises’ appeared 13 times. Promise number 1: “Appoint independent and professional boards.” Promise number 2: “Assign quantifiable targets and monitor on regular basis.” Promise number 3: “PIA shall be transformed into a profitable and reputed airline of the region.”
On July 17, the PML-N government announced the establishment of a three-member commission for the “selection of chief executive officers (CEOs) of State Owned Enterprises.”That is about all. There are no professional boards anywhere; no signs of any quantifiable targets and PIA continues to lose Rs85 million a day every day of the year (on its way to lose Rs30 billion this year). For the record, the commission since its establishment has already managed to lose Rs65 billion.
The term ‘circular debt’ appeared seven times. Promise number 1: To “narrowly target tariff subsidies only to lifeline consumers who consume up to 100 units per month.” Promise number 2: “We will completely resolve the issue of circular debt.”Promise number 3: To permanently “eliminate circular debt.”
Yes, the new power policy has provisions to “narrowly target tariff subsidies”. Yes, a colossal Rs480 billion worth of circular debt was paid off within weeks of the prime ministerial oath-taking. The good news, however, ends right there. For the record, within about four weeks of the Rs480 billion payment the devil is back with a vengenance – Rs62 billion worth of new circular debt has already been accumulated.
The word ‘growth’ appeared 33 times. The Karachi Stock Exchange (KSE) has grown the most – and the fastest. Since the PML-N’s election victory KSE has grown by a hefty Rs800 billion or $8 billion (imagine, we are begging the IMF for a $5 billion loan). Apparently, collective investor wisdom is very bull on the PML-N’s future economic plans. The other thing that has really grown is power generation – from 8,000 MW before the election to the current 15,000 MW.
The word ‘energy’ appeared 42 times. Promise number 1: To reduce the cost of energy. Promise number 2: To “reduce the cost of doing business.”Here’s what the new power policy promises: The peak commercial rate for energy of 29 US cents per unit as compared to 13 US cents per unit in India and seven US cents per unit in Bangladesh. To be certain, the cost of doing business in Pakistan is going up, not down.
On June 10, PM Nawaz Sharif promised to “review the performance of ministers every three months.” The review would have to take place by September 5 but to date there isn’t any Performance Assessment Framework.
Pakistani voters right now are on pins and needles. Who said that we “promise according to our hopes, and perform according to our fears?”