Published in Dawn, February 3rd, 2016
‘Democracy is a charming form of government, full of variety and disorder.’ — Plato
AS the democratic process unfolds in Pakistan, one wonders what kind of a hybrid would emerge in times to come. Don’t get me wrong: no sane person would argue against the supremacy of democracy. But yesterday’s turn of events — the state shooting down the peaceful protesters at the Karachi airport — indicates this hybrid democracy could be worse than martial law. The dark underbelly of our democracy is marred with bloodied repression of workers’ rights, the military calling the shots, co-optation by the political elite, and a parliament that passed the draconian PPA 2014 and 21st Amendment without batting an eyelid.
Instead of judiciously handling the process of privatising PIA, the state’s hasty decision to enforce the Essential Services Act, and worse, to shoot the protesters indeed bodes ill.
Privatisation of state-owned enterprises in Pakistan has had a long and convoluted history, and of all the SoEs, privatisation of PIA has emerged as the most complicated and controversial. The story of its privatisation is traced back to 1988 when a British consultant proposed that privatisation in Pakistan should be based on a public-participation approach and Pakistan’s capital markets developed by inducting hundreds of thousands of small savers into share ownership. Seven companies were short-listed for widespread offers and this included PIA. In 1990, only 10pc shares of PIAC were disinvested in May 1990 at par value. Later, the plan was abandoned.
During the 1990s and 2000s the government came up with several plans, including the one drawn by the World Bank, but nothing materialised and, in 2009, PIA was dropped from the privatisation list only to be taken up again. In October 2013, 69 SoEs for privatisation were approved. PIA was one of the 39 entities marked for ‘early implementation’: 26pc of PIA’s shares were to be offered to ‘strategic investors’ by the end of December 2014. Then again, due to opposition, privatisation was postponed till 2015. In August 2015, the government told the IMF it would privatise PIA by March 2016.
The government, it seems, went berserk, with differences within its own ranks, the opposition from the PPP and the resistance from employees: in a very scandalous move, the ‘democratic’ government promulgated the Pakistan International Airlines (PIA) Corporation Conversion Ordinance in early December 2015, and later shamed by all, converted the ordinance into a bill on the last day of 2015. When the PIA unions and associations went on strike, the government instead of negotiation and consensus-building, used the Essential Services Act.
One of the crucial factors in privatisation is labour relations and its impact on employment. Analyses of this aspect are less frequently done, or shared and highlighted in the media as it is considered highly political and a sore point by analysts, mainly because in Pakistan SoEs are grossly overstaffed due to political patronage of every political party who comes to power. According to an earlier figure, the aircraft to employee ratio in PIA was 1:418 as compared to 1:106 of the US national carrier and 1:229 of the Indian airline.
Nonetheless, we need to remember that an inter-ministerial committee constituted in 1991 to deal with labour employed in SOEs and safeguard their rights had got the workers’ consensus on a package of incentives for labour with workers’ representatives through the All Pakistan State Enterprises Workers Action Committee. To what extent the commitment was honoured is another debate.
There are valid arguments on both sides — privatise or not. It is better to accept at this juncture that the process of privatisation in Pakistan has gone beyond that debate. Yet it definitely does not absolve the government of going overboard and bypassing due process, crushing the voice of the employees. Needless to say, PIA’s current state of affairs, ie financial losses, is due to the government’s own flawed policies and lack of efficient leadership.
During the current episode of the spiralling of complications and controversies around PIA’s privatisation, what was amiss was information on the level of negotiation between the management and employees. The PIA employees’ four-point agenda comprises demands the state should have considered and negotiated. Also, hidden from the public view is how the government would resolve the question of labour retrenchment, and what possible policy measures it is going to adopt.
There could be three options. One is to delay retrenchment and spread it over a longer period after privatisation. Second is to freeze recruitment and offer generous retirement schemes. Third is to reintegrate workers into other forms of employment. In any case, it is essential that the government take privatisation-induced social protection measures.