25 January 2004	Sunday	02 Zilhaj 1424

KARACHI: The strength of government employees varies from time to time and is determined by the framework of economic policies formulated in various stages of social evolution. Currently, "economic progress" is marked by social stagnation.

In the initial phase of industrialization, economic development in Pakistan was driven by a large and expanding public sector as a very weak private sector was shy to undertake varied capital spending risks.

Nationalization of banks and basic industrial units in the early 1970s further strengthened the public sector and swelled the numbers of state employees. The government emerged as a big employer.

When privatization became a cardinal principle of state policy in the 1980s, a reverse process began. In the 1990s, large state units were trimmed to prepare them for sell-off. Thousands of employees lost jobs in an environment of low economic growth and few alternative employment avenues. Nor were those, who lost jobs trained in the new skills in demand.

Now, it is the explicit official policy to cut government jobs, says Dr Kaiser Bengali, a noted economist when asked to comment on the emerging public sector employment scenario.

He agreed that labour-intensive education and health projects did create jobs but observed that spending on the social sector and human resource development was declining in real terms.

Three leading banks, National Bank, Habib Bank and United Bank, all state-managed, reduced their staff strength from 76,500 in 1996 to 39,600 in 2002. But many professionals at senior management level and scores of MBAs were hired to fill in the "skill gaps". UBL has been privatized and a bid for HBL has been just accepted.

Withdrawing from cotton and rice trading, the government has closed down the Cotton Export Corporation and the Rice Export Corporation of Pakistan, employing 1,300 and over 2,100 persons, respectively. Some 40 members of the RECP staff were transferred to the Trading Corporation of Pakistan which handles import- export of commodities in times of domestic shortage or trade surpluses difficult to handle by the private sector.

Pakistan Steel has cut the strength of its staff by 50 per cent, from 28,000 to 14,000. The present management reckons that the mill requirement is merely 9,000 employees. PS was burdened with surplus staff by successive governments. The status of the government as an employer is shaped by the changing balance between the government and the market. With the welfare state whatever there was of it withering away, the government is switching over to the role of a regulator and facilitator that tends to work in favour of special interests at the cost of the general public.

In this emerging environment, not only public sector employment is being reduced but corporate umbrella for lifetime jobs is being lost. The outcome is a jobless economic growth.

To cut costs, permanent jobs are being replaced by contract jobs and outsourcing. PIA sources put the total employee strength at 19,617, including 856 contract jobs.

As many as 3,756 work on daily wages. Recently, it has dispensed with the services of 1,872 employees under the golden handshake scheme.

Of the 300 people at the TCP, 120 are on contract.

As employment was banned in Karachi Electric Supply Corporation in 1990, the corporation got special permission to hire 3,000-3,500 persons on contract in a total strength of 13,000. KESC sources say the Privatization Commission consultants reckon that the organization is understaffed.

Under a flexible labour policy, contracts are also changing the nature of employer-employee relationship.

A creeping disintegration is taking place in the traditional wage-labour system, an anchor of production since the start of the industrial revolution. Hence the institutional space for permanent employees is shrinking.

The privatization process has coincided with a focus on productivity and efficiency to face the demands of globalization. The induction of high-tech methods to modernize business operations has raised productivity but with fewer jobs, creating redundancies.

In a two-phased programme, the Karachi Port Trust has reduced the strength of its workers from to 14,000 to 8,000. And is going on to ultimately cut the number to 4,000. The staff strength has taken a major hit from mechanization of port operations and privatization of berths.

Jobs are lost when government shirks from business. This is one aspect. But government spending on social and physical infrastructure generates a lot of jobs.

Unfortunately, social spending, according to Social Policy and Development Centre, is declining in real terms. In this process of social exclusion, the common man is left to fend for himself. Inadequate expenditure on infrastructure is just picking up.

Under the Civil Service Reforms, says the recently finalized Poverty Reduction Strategy Paper (PRSP), measures have been proposed for "rightsizing" of the government. "There has been substantial progress in the area that includes retrenchment of over 40,000 posts at the federal level," PRSP adds.

The government wants to focus on building public sector capacity by creating "champions of change at the senior level" and "developing a critical mass of internationally trained specialists, decision-makers and implementers".

Under consideration is a new federal service, a national executive service, a district civil service and a tehsil municipal service. The proposed national executive service has three broad streams of professional specialization, economic management, social sector management and general management. The reforms will impact on the employment scene one way or the other.

Of course, many contract jobs are being created by infrastructure projects like Gwadar/dams and schemes launched by district governments.

According to press reports, Karachi City Nazim Naimatullah Khan says Karachi Water Supply Project for 100 million gallons additional water has provided jobs to some 5,000 persons. Essentially, these jobs are of a temporary nature.

The federal minister for information technology says that his ministry will invest Rs1.5 billion in IT projects. MNCs have been asked to sublet contracts to local software firms.

But trimming Wapda and Railways has been an impossible task. Wapda has 1,47,000 employees. There has been no retrenchment.

Some time back, a proposal was being considered in the Railways to reduce the strength of the staff from 78,000 to 50,000 but the proposal did not materialize. With plans for linking Chaman to Kandahar by rail and the opening of Khokrapar route to India, a portion of surplus staff can be more productively utilized there.

Both in Wapda and Railways, the huge numbers have overwhelmed our economic managers. And according to press reports, Pakistan Telecommunications Company Limited has 68,000 employees.

The government should review its status as an employer as well as its macroeconomic policies to generate employment. The state cannot be absolved of its responsibility to provide jobs.