The government has woken up to the need for rightsizing the workforce in PIA to restore its financial health and reclaim its sagging reputation. The government has decided, in principle, to lay off 3,861 regular and contractual employees through Voluntary Separation Scheme. This measure would reduce PIA’s annual losses by Rs4.2 billion. Those working on 644 positions filled through outsourcing will also be relieved. The government would recover the Rs12.9 billion cost of VSS in two and a half years. After the planned lay-offs, PIA would achieve the desired ratio of 250 employees per airliner (1:250) for its 30 aircraft. Internationally, this is deemed the optimum ratio. A workforce of 7,000 to 75,000 is considered sufficient for PIA.
Possibly, the International Civil Aviation Organisation’s warning to Pakistan over its inability to satisfy the Significant Safety Concerns prescribed by the former has hastened the government’s decision to administer the bitter pill. In a recent letter to the Pakistan Civil Aviation Authority, the ICAO had expressed dissatisfaction with Pakistan’s licensing and training of pilots and had warned that the country’s aircraft and pilots could be barred from flying to 88 countries. The ICAO had given the PCAA 90 days to take remedial measures. The issue came to the fore when Ghulam Sarwar, the Aviation Minister, stated a few months ago that 262 Pakistani airlines pilots, including 141 working for PIA, possessed dubious credentials. PIA is already barred from flying to the UK and EU member countries.
The minister’s announcement brought the CAA under a cloud of doubt. Later, pilots’ credentials were subjected to thorough scrutiny and investigation. Inquiries established that licences of several pilots were fake, and these have been cancelled. The Pakistan Airlines Pilots Association too had said failure to take corrective steps would lead to a disastrous situation. PIA has long been in the red mainly due to being overstaffed. Some quarters might criticise the government’s decision as hasty. Sometimes haste becomes necessary.
Economy: encouraging indicators
The month of October has given the government ample reasons to breathe easy about the economy. According to the SBP data, foreign direct investment (FDI) hit a 10-month high of $317.4 million during October; remittances from expat workforce during the same month rose 14.1% year-on-year to $2.3 billion, clocking in above the $2 billion mark for the fifth consecutive month; and the volume of exports in October grew 29% month on month and 6.12% year on year.
These foreign inflows in the shape of FDI, exports and remittances — coupled with the foreign currency receipts under Roshan Digital Account introduced by the central bank for non-resident Pakistanis — have served to strengthen the value of rupee against the US dollar, besides reducing the cumulative current account deficit further. For the first time in six months, the dollar fell below 160 to a dollar at the beginning of the ongoing month and slid further to Rs158.91 against the rupee in the interbank market. As regards the current account, there has been rather a surplus of $792 million in the first quarter of the current fiscal year. And this is the first quarterly surplus in the current account in more than five years.
Besides, government efforts to push economic growth have also been proving successful. The construction package provided by the government has resulted in record cement sales. Fiscal stimulus packages offered by the central bank to businesses in order to offset the Covid impact are also paying dividends, bringing about the revival of the large-scale manufacturing sector. That our stock market has surpassed others in South Asia is worth taking pride for.
However, sustaining the growth momentum is the real challenge for the government given the fact that: losses incurred by state-owned enterprises continue to accumulate; circular debt keeps ballooning; expansion in tax base remains a concern; the public debt is rising and rising; and the food inflation remains out of control. All these areas require structural reforms — something that Prime Minister Imran Khan has paid little attention to since taking over nearly two and a half years back. The government cannot afford to waste any more time.
After the US vote
It has been over two weeks since the US presidential election, we now know that America will have a new leader on January 20. Although President Trump is refusing to publicly accept defeat, recent reports suggest he is only doing this to scam donations for his campaign’s legal fund into his own pocket. No legal challenges, no legal defence donations to pocket.
President-elect Joe Biden’s team has already started work on the transition, announcing his preliminary coronavirus taskforce and a host of executive orders that he will sign as soon as he takes office. His coronavirus taskforce already shows he means business, with all but one of the members having a medical degree and an extensive background in either virology or public medicine. For comparison, Trump’s official coronavirus taskforce is led by Vice President Mike Pence, whose refusal to listen to medical experts during his governorship of Indiana led to an HIV outbreak in the state. Overall, only eight of Trump’s 27-member team are medical doctors.
The executive orders mostly deal with undoing Trump’s efforts to loosen environmental controls. That is not to say that the Trump administration is making this easy. They are making every effort to damage the Biden presidency through comical pettiness. Trump appointees are not allowing Biden access to funding earmarked for incoming presidents to begin setting up their administrations to hit the ground running. Biden has also not been authorised to receive the Presidential Daily Brief, as is customary, to familiarise him with top-secret information.
Trump lackeys such as Secretary Pompeo are also refusing to admit that Trump lost, even though the president’s lawyers are being laughed out of courts across the country for their frivolous voter fraud cases. Meanwhile, Biden also faces the possibility of having a hostile Senate — Democrats control the House, but they must win runoff elections for both Georgia Senate seats on January 5 if they are to take control of the upper house.
