With every flight, Pakistan’s state-owned airline demonstrates the economic challenges facing the country’s new government.
Each time a plane belonging to Pakistan International Airlines takes off, odds are the aircraft is more than 25 years old and not in the best of shape. It is likely running late. It probably has a bigger crew than necessary — the airline has four, even five, times the staff per plane than a typical carrier. And ultimately, each flight is probably costing the state money instead of adding to its bottom line.
PIA loses the equivalent of around $305 million a year, and that is emblematic of the problems with Pakistan’s state-owned enterprises. Experts estimate state-owned firms lose at least $4.1 billion a year, holes the debt-ridden government plugs through cash injections, guaranteeing loans or other means. . . .
Pakistan lists dozens of entities as state-owned enterprises, covering sectors such as oil, steel, fertilizer, transport and more, although not all are intended to generate revenue. Over the years, various ruling parties have used such businesses as sources of jobs they could hand out to supporters, even as they have failed to invest in maintenance and upgrades of the infrastructure the firms needed.
Prime Minister Dmitry Medvedev approved a plan that should facilitate the access of Russian IT companies to the public procurement of innovative products and services. Such measures should increase the presence of Russian suppliers in state companies.
Medvedev signed a “roadmap” to expand the access of small and medium-sized businesses to infrastructure monopolies and companies with state participation.
According to the plan, the “roadmap” aims at increasing the purchase of high-tech goods and services from small and medium-sized enterprises by state-owned companies compared from 100% registered in 2013 to 300% by 2018.