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Largesse At Public Expense

Public sector performance is often associated with indolence, inefficiency corruption, wastage etc, but the public sector still has a major role in the developing economies. Even the first world cannot do without it, in developed economies their public face is disguised better. If every utility or service was left to the mercy of market conditions, a vast mass of the population could not afford it. Because the public sector cannot be entirely eliminated, the pragmatic solution has been to staff entities with successful executives from the private sector, and/or recruit them directly from Business Schools. At times private entrepreneurs also take up management slots in the public sector in trying to turn the corporate entity into economic viability. This is true not only in Pakistan but is the same all over the world, the major examples being in UK and Europe.

Unlike in the first world, where qualifications are scrupulously proportional to performance, in the third world appointments are mostly based on connections. Once you bring nepotism and favoritism into management, the chances of a public sector entity becoming economically becoming viable is muddied. One has to be very careful in choosing only those executives who have shown above par managerial performance, for the top-most positions the managers so selected must have shown hands-on leadership managing corporate entities successfully in the private sector. To make someone who has not been a successful head of a private sector entity into a head of a far bigger public sector entity is at best a gamble, not even a calculated risk. Not only in Pakistan but in many countries of the third world, and even in developed economics, this gamble is made at public expense.

During the period from 1974 onwards bureaucrats were put   into   nearly   all  the   public  sector   management   slots in Pakistan, this was an unmitigated disaster.  Barring a few exceptions, the bureaucrats ran riot in the government and semi-government corporations, driving profitable units into the ground mostly by mismanagement, maladministration, inefficiency, corruption, etc but also because they did not have the necessary commercial background to manage commercial entities.  For the most part the Musharraf regime (and the civilian government associated) have chosen excellent corporate executives, some of whom sacrificed better terms and conditions abroad to come back to Pakistan. Public sector performance has certainly improved considerably after the induction of corporate executives from the private sector. From time to time managerial appointments are still made on the basis of influence and/or personal likes/dislikes, albeit some on the basis of perception far removed from reality. Commercial losses associated with such appointments are inevitable because of bad commercial decisions, this is force-multiplied when the individual proceeds to spends public money on himself and his own comforts. However far more dangerous is the image-building of self that the “favoured one” indulges in at public sector cost. There is always the joker in the pack, the person who glorifies his own reputation on someone else’s performance.

An executive could be personally corrupt, or he could have other negative traits, there is need to closely check his corporate and personal antedents.  Foreign forms regularly use the qualified companies for this purpose, a “due diligence” is done whereby personnel of the research cell speak privately to his colleagues and subordinates to find out traits that may not be apparent on any CV and/or during interviews. Above all what was the real evaluation by his former employer, some in No 1 position in Pakistan presently were labelled as “NOT FIT” to be No 1 by their former multi-national employer.  This “soft” enquiry could further discover whether the executive has a penchant  for misusing authority for illegal gain, for using the company facilities for personal comfort, eg have more vehicles than authorized to him, employ more domestic staff than allowed, misuse of telephones, entertain friends at company expense,  in short the big life, cigar and all, at public expense, etc.

In Pakistan the favourite ploy for contract employees is to take their salary in advance for the contract period, some take out loans for house construction on easy terms, rent out their own house to the Corporation at an exorbitant prices, employ servants at the house who are shown in other appointments etc.  A casual enquiry from the vendors will reveal as to whether the executive favours a transparent process or favours a favorite.  His lifestyle will also easily disclose whether the person concerned is living within or beyond his means. A discreet survey of the “entertainment” done by an executive in a public sector corporation in Karachi as far back as the 80s showed that 80% of the lunches he hosted in a year were for friends and colleagues coming from Islamabad.  Similarly on Friday evenings one could not get seats on PK 308 to Islamabad from Karachi and PK 309 in the way back. It seemed all the meetings for those living in Karachi were scheduled for Saturdays in Islamabad and vice-versa to enable the executives to have a long weekend home at public expense.

In third world countries like Pakistan one most remember that perception rather than facts is nine-tenths of the law, it is easy to separate perception from reality by making discreet enquiries from the Public Relations (PR) or advertising agency that the corporations use.  While image-building may be closely guarded confidential information at higher levels, low-level executives will easily disclose if the emphasis by the management was  on  propagation of an individual or the corporate entity.  The media is particularly vulnerable if the corporate entity has large budgets, they can be blackmailed if there is any hint of dissent.  Some do it in a sophisticated manner, in the third world corporate executives can be very brazen about promoting their own image at the company’s expense. This makes them more “market-worthy”.  They can than apply for another job, leaving their present corporation near bankruptcy.

One can quote Augustus Ceaser to best describe the penchant of public sector executives to distribute public largesse as if it belonged to talking about them, talking about Marc Antony in the Roman Senate he said, “Antony says that all he has belongs to Rome and than proceeds to give away to his Egyptian mistress all that of Rome that does not belong to him”, or words to that effect. Even the private sector does not accept such excess.  In a recent case the No 2 of a major international bank was fired for such excess, this included a marble fireplace in his office suite in Manhattan.

There is no doubt that more exacting standards have been set for selecting personnel for both government and semi-government corporatives.  However the standards are often by-passed to oblige some patron, Pakistan has not shed itself from the client-patron syndrome. While giving credit to Pervez Musharraf, and by extension his very “first” corporate executive, the present PM Shaukat Aziz, the fact remains that many executives are still appointed on the basis of personal like/dislike, or to satisfy some influence and/or obligation.  This must be stopped forthwith, this country cannot afford largesse being distributed at public expense.

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