A significant political negotiation looms over the distribution of the NFC (National Finance Commission) award, spurred by the IMF’s push for a return to pre-18th amendment allocations

Ansar M Bhatti

ISLAMABAD: Tensions are brewing as the coalition partners brace for a looming showdown over the contentious issue of privatizing key state-owned enterprises, including Pakistan International Airlines (PIA) and the Steel Mills. This clash is expected to come to a head amid discussions surrounding the National Finance Commission Award (NFC), presenting yet another formidable challenge for the coalition.

The Pakistan Peoples Party (PPP) leadership has taken a firm stance against the privatization of the national flag carrier, PIA. Their opposition is not solely rooted in concerns over potential declines in PIA’s performance post-privatization, but rather in the fear of mass layoffs that could affect tens of thousands of employees. These employees, many of whom were hired during various tenures of the PPP government, now face the prospect of unemployment should privatization proceed unchecked.

The Pakistan International Airlines (PIA) is facing significant challenges due to its excessive staffing levels and longstanding financial losses. This over-staffing has contributed substantially to the airline’s inefficiency and financial woes over the years. Many positions within the organization are filled based on political affiliations rather than merit, resulting in a workforce that often lacks the skills and motivation necessary to drive the airline’s growth.

Furthermore, the PIA continues to grapple with the repercussions of being banned from operating in European countries. This ban was imposed following the revelation of fake degrees held by some Pakistani pilots during the PTI government’s tenure. This incident not only tarnished the reputation of the airline but also underscored broader issues of regulatory compliance and safety standards within the aviation industry.

The Pakistan Steel Mills stands as a poignant example of a burdensome venture draining resources without yielding commensurate benefits. Despite its potential, the institution has become synonymous with inefficiency, with a significant portion of its workforce seemingly more focused on reaping perks than contributing to its productivity. The prevalent presence of employees affiliated with political parties such as the PPP and MQM further complicates matters, as any attempts to privatize or reform the Steel Mills are met with staunch resistance, effectively thwarting much-needed efforts for revitalization and efficiency enhancement.

One plausible explanation for the PPP’s decision not to join the cabinet could be its reluctance to be in a position where opposing the privatization process would be challenging. Anticipating this scenario, the PPP may opt to exert pressure on the PML-N government in the near future, leveraging their awareness that the government’s stability hinges significantly on PPP support. This strategic move could potentially empower the PPP to influence policy directions more effectively, using their political leverage to shape governance outcomes in alignment with their priorities.

A significant political negotiation looms over the distribution of the NFC (National Finance Commission) award, spurred by the IMF’s push for a return to pre-18th amendment allocations. Prior to the 18th amendment, 47.5 percent of the federal government’s total revenues were distributed among the provinces. However, post-amendment, this volume was raised to 50.5 percent, reflecting a significant increase. The IMF contends that this shift has led to an imbalance, asserting that the provinces are receiving an excessive share and advocating for a rationalization of the distribution.

Given that the PPP played a pivotal role in championing the 18th amendment, it is poised to resist any alterations to the NFC award. Their historical stance on decentralization and provincial autonomy aligns with the increased allocations to the provinces post-amendment. Consequently, the PPP is likely to vehemently oppose any attempts to roll back these allocations, viewing it as a regression in the devolution of powers and resources to the provinces.