Development / 28.03.2016

By Anjum Altaf and Nadeem ul Haque Should PIA, a State Owned Enterprise (SOE), be privatized or not? It is poorly run, losing a great deal of money, and a drain on the budget. But what does that have to do with PIA being a SOE? Therein lies the real question and some answers to our particular predicament in Pakistan. If one were to line up all potential services with the smallest in scale at one end to the biggest at the other, readers would likely agree that the smallest (say, tea stalls at a railway station) are better provided privately and the largest (say, national defense) by the public sector. The reasons are not hard to fathom – bureaucracies are not good at adapting to rapid changes in market conditions and consumer preferences; markets cannot exclude those unwilling to pay for a service like national defense. In...