THE nostrum that the government should not be in the business of business, i.e. be engaged in economic and commercial activities like running cement and ghee manufacturing companies, banks, etc started to gain acceptance in the early nineties in Pakistan.

But government pervasiveness in some sectors of the economy, particularly oil and gas, continues unabated. At that time it was argued, rather persuasively, that the government should vacate these areas for the private sector and instead focus its energies and limited financial and human resources on the delivery of neglected social services like education and health.

The plea for a new vigorous role for the state was simply lapped up as an obvious truth without a shred of evidence that it could perform these functions; to deliver decent quality social services, effectively and cost efficiently. To assess the potency of this proposition, the strategy embraced for its implementation and the outcome of its execution, this article focuses on the education sector.

Despite abundant proof of mismanagement — non-existing schools and teachers, referred to as ‘ghost schools’ and ‘ghost teachers’, of tutors playing truant or not fulfilling their responsibilities, the many who are not recruited on merit and payments for ghost buildings or staff landing in the pockets of corrupt government personnel — the government and donors alike decided to pour more resources into this leaking education bucket. The mega governance issues of teachers not hired on merit and protected by politicians because of their role as polling agents during elections and once appointed they become members of powerful unions that blackmail governments, remain unaddressed.

This writer has argued in these columns before, that it is easier to dismiss elected governments than civil servants in Pakistan. Especially teachers who do not turn up for duty, let alone those who do turn up and fail to perform their services!

In the meantime, parents of children who are meant to be educated in these government-managed institutions simply gave up on the public sector and in despair chose private schools for their children. The private sector responded to these opportunities and set up schools that catered to these demands. Contrary to popular perception, as reflected in debates in the media about exploitative private schools, the competitive private sector services all segments of the population with a vast majority charging less than Rs150 per month and accommodates children from less prosperous households.

It has understandably been active where the environment is more lucrative, in terms of a large and buoyant market such as the relatively more affluent Punjab, Peshawar, Quetta and the main cities of Sindh such as Karachi, Hyderabad and Sukkur. As a result, the poorest households in the less developed parts of the country like rural localities have no choice other than the almost non-functional government schools.

The fact that parents have rejected the services provided by the government is emphatically reflected in these figures: there are 62,000 government schools in Punjab and more than 40,000 private schools. The government and donors simply ignored this overwhelming proof and after what was touted as a careful and dispassionate analysis of the situation, arrived at the bizarre conclusion that parents were not enrolling their children in government schools because these institutions did not offer adequate facilities in the shape of toilets and boundary walls. So they built this infrastructure, but to their utter surprise, additional children did not come to these schools. The inference they drew from this experience was that perhaps what was missing was additional classrooms. Lo and behold, these were added but the attendance remained poor, while the population of students in private schools grew in leaps and bounds.

Next came the argument that what was needed was (a) more qualified teachers, although the comparable private schools had less academically qualified teachers who were being paid a quarter of the salary of a government school teacher, (b) recruitment on contracts that could be terminated if the teacher was frequently absent or did not perform his/her duties diligently and (c) tied to a school so as to make them accountable for service delivery.

But to their horror these changes still made little difference to the enrolment in government schools with pressure starting to build to regularise the contractual staff that began to imbibe the culture and work ethics of their more recalcitrant counterparts enjoying a permanent status. In other words, despite the customer rebuff, and which should have been acknowledged as a devastating testimony to the failure of government service delivery, donors and well-intentioned philanthropists continued to press for more dedicated resources. And more money got poured into a dysfunctional system, which was akin to throwing good money after bad. The sad reality was that no one wanted to hear the message from the consumers; they did not like the quality of schooling on offer from the government. They were not willing to accept that even teachers of government schools where additional infrastructure had been provided were sending their children to private schools.

Unless we accept that the objective of providing effective and cost efficient education cannot be met through the public schooling system we will continue to flounder, wasting scarce resources, chasing a mirage. In this writer’s view the best way forward for the government is to make sure that children get free schooling using the private sector for service provision instead of providing the service itself. Study after study has demonstrated conclusively that better quality education is being provided by private schools at half of what it costs the government to educate a child in its own schools.

The Punjab Education Foundation, which has been working for just over two years in seven districts with mostly out-of-school children, has adopted this approach and in the process is educating more than 475,000 children.

It has tried to show the government that better quality education can be imparted by (a) providing funding at the rate of Rs300 per child, which is 40 per cent less than what it costs the government — making the partner school free for enrolled children, thereby enabling even the poorest households to send their wards to these private schools; and (b) by making this financial assistance subject to a child’s performance in six-monthly tests in languages, mathematics and sciences.

THE hefty increase in gas prices will lead to serious consequences for the middle class and trade and industry sectors. It will aggravate inflation and depress GDP growth and employment. The universally acclaimed principle of economic policy-making is that changes should be gradual and phased. A shocking jump of 31 per cent in the price of a vital commodity like gas, which supplies 50 per cent of national energy, is bound to make a profound impact

A gradual increase in oil prices would have been justified because the international price of this commodity has surged beyond all expectations. With our domestic production being only 18 per cent of our national requirements, the government cannot subsidise oil beyond a limit. However gas production is cent per cent indigenous. There is no reason why its price should follow the trend in oil prices and not be determined by the cost of production of gas and positive returns for gas producers and distributors.

The government has failed to explain this sudden jump in domestically produced gas. If the objective is to encourage foreign firms to increase gas exploration, this objective can be met by assuring that gas from new wells dug in 2008 and beyond will get higher prices. Even today, major gas producers like Oil and Gas Development Company (OGDC), Pak Petroleum and Pak Oilfields are very profitable firms and they do not have to be pushed into greater profitability.

The shoddy manner in which the gas price policy was announced is deplorable. The first day saw an increase in CNG prices which was corrected the following day when the error was realised. Trade and industry, which is already suffering on account of acute load shedding, will get another blow from the surge in gas rates. If independent power plants that remit their huge profits abroad and are run by foreigners have been exempted from taxes, all power plants including captive power plants should have been exempted as well.

There is no justification or explanation for this ill conceived measure. In all oil producing countries, the commodity’s domestic sale is far below the international price. Their governments care for the welfare of their citizens. Unfortunately our economic policy-makers do not realise the repercussions of such a sudden and gigantic hike in oil price on the economy and on the welfare of citizens.