Pakistan's Public Sector Needs a Course Correction

Pakistan's Public Sector Needs a Course Correction
I had a busy professional life until 2019; after that, while I remained technically employed, I found myself having ample time at hand. Having negligible experience of the public sector; I was unaware of the shenanigans which lie lurking in its corridors for independent spirited professionals. I expected that someone in the power corridors would intervene, improve the ridiculous situation and me back to work. But, alas; that was not to be. The episode can prove to be an excellent case study for the students of public sector. As an alternate medium of self-expression, I discovered researching and writing on the issues afflicting our 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 astounding. It highlights the chaos in the pertaining remuneration regime and a lack of a comprehensive performance based regime despite the 29 commissions and committees formed for this very purpose in the past 74 years. It also informs us that compensation packages of civil servants are significantly larger than the private industry.

It could help if the report had 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 & education, population explosion etc. leave nothing to imagination. Salient governance indicators provided by the World Bank further compliment the observation. For example: Pakistan’s percentile ranks on Government Effectiveness, Regulatory Quality; Rule of Law, and Control of Corruption are respectively: 31.73, 24.04, 25.48 and 22.12. The same for India are: 66.83, 47.60, 54.33 and 46.63. For Norway, the numbers read: 98.56,95.67, 99.52 and 97.60.

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

1) Most of the reforms have, so far, dealt with cosmetic organizational restructuring and adjustment of pay scales etc., while ignoring critical issues such as integration of specialists and professionals in the Administrative Services; even though Cornelius Commission had recommended that in 1962.

2) 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 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 judgment 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 a part-2 of the study while keeping in view of the observations and suggestions made below.

First, 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.

Second, the report treats 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 jeopardizing merit and creativity.

The root cause of the entire issue is the lack of 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 (Petro China, 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 PIAs, PSMs and PRs 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; e.g.: 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 board rooms, the entire discourse generally remains too mediocre, evasive of real issues and sometimes even permeated with suffocating conspiratorial overtones. Mostly irrelevant and shallow questions fill up the conversation and complex presentations are met with empty stares and fidgeting in the chairs. Such discourses mostly lead to indecision or ill-considered decisions; all because of the dearth of the required knowledge and experience, an integral requirement for informed decision making. We seldom find such profiles in the board rooms of the private sector because their balance sheets simply cannot bear the load.

If I own an airplane that doesn’t mean that I should start flying it myself. Operating the boards is a professional job and should be left to professionals. Therefore, a controlling ministry may focus on instituting a transparent process for achieving professional boards instead of the current practice of direct presence. An economic comparison by PIDE of status quo versus professionalization of the boards can help to further highlight the requirement of the said process.

Third, the absence of any professional 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. Secondly, 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.

What can be done

The public sector can prove to be the pivot of a major economic turnaround in Pakistan; provided it is equipped with the required governance structure and professional capacity. Therefore, it is imperative that instead of blaming the International Monetary Fund and other outside forces for our economic ailments, we undertake a rigorous introspection and correct our path immediately. PIDE can of course help in that through a detailed study while keeping in view the above factors.

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