Assess PEs Thoroughly

PUBLIC enterprises have stood out as viable development collaborates in many developing countries. The public enterprises had been established with the modest objective of serving the people when the private sector was in its incipient stage. With the wave of industrialisation and globalisation picking up in many developing countries, the role of the public enterprises was minimised after the private sector emerged as a capable service provider. Many public enterprises then failed to live up to the aspirations of the general people in the wake of stiff competition.

The public enterprises failing to keep abreast with the open and market oriented economies witnessed a pitfall with the flow of time. The vicissitudes witnessed by the public enterprises in Nepal reveal that they too have faced the test of time with increased competition and requirement to upgrade the state of their services. Nepal adopted a liberal and market oriented economic policy in the nineties after the restoration of democracy. The government’s policy to encourage the private sector in different service industries brought about radical changes in the quality of services. The efficiency of the public enterprises started to decrease in the absence of programmes to improve their management.

Poor management, over staffing and the lack of a viable plan to make their services competitive have been attributed as the negative factors that have questioned the existence of the public enterprises. To make matters worse, the public enterprises turned into recruiting grounds for the workers of the political parties. Frequent changes in the management contributed to add confusion thereby adversely affecting the output of the public enterprises. With the annual earnings of these enterprises going down every year, the government is now facing a dilemma whether to let them carry on with their operations or to shut them down completely.

Finance Minister Ram Sharan Mahat has finally revealed the harsh reality relating to the causes behind the deplorable state of the public enterprises. Addressing the conference of the Nepal Trade Union Congress, Mahat said that the conditions of the HMG owned corporations were worsening because of political interference, weak management and widespread corruption. Now that the harsh reality has been accepted, the government needs to make a thorough assessment of the public enterprises. The ones that stand a chance of survival must be given an opportunity to improve their performance. As for the public enterprises that have reached the point of no return, the government must initiate a transparent mechanism for their privatisation. This alone can lessen the burden on the government’s exchequer.

Other Story

• Upgrading Medical Facilities