Downsizing in government departments
The restructuring exercise is
aimed at introducing austerity and economy
From Shamim Ahmed
Oct 23 - 29, 2000
About 25000 employees of the Federal Ministries and attached
departments may loose their jobs under the downsizing exercise which is in the final
stages these days. The report of the committee on administrative restructuring is being
given final touches and will be presented to the Chief Executive by the end of this month.
The restructuring committee on rightsizing/downsizing is headed by
Deputy Chairman Planning Commission Shahid Amjad Chaudhry. While formulating its
recommendations, the restructuring committee is also taking into account the reports of
Pasha Commission and the Fakhr Imam committee which were assigned the task of rightsizing/
downsizing during the previous government of Nawaz Sharif.
According to the government sources the restructuring exercise is aimed
at introducing austerity and economy. The report has been prepared on the bases of
recommendation received from different government departments who were asked to propose at
least the percentage downsizing of their employees. It is learnt that 26 ministries and
divisions have shown their willingness to surrender their 24,599 posts 845 posts of
BPS - 16 to 22 and 23,754 posts of BPS 1 to 15. The quest for economy in public
expenditure and raising quality of governance starts with downsizing which needs a number
of steps, like abolition, winding up, privatization, mergers, transfers and
downsizing". The sources added that once the restructuring report is finalized, it
will translate into reality the Chief Executive's desire for downsizing as well as
rightsizing in different government departments.
Sources in the Cabinet Secretariat revealed that there are 31 divisions
with 11,909 employees and the wage bill of Rs. 2.821 billion. The number of attached
departments is 422 with 374,030 employees and salary bill of Rs. 17,456 billion, and 105
corporations with 549,004 employees and the wage bill of Rs. 42.553 billion.
The sources were of the view that the downsizing will not only reduce
establishment cost but will also lead to other benefits like reduction in wastage,
corruption and inefficiency.
The World Bank and other international financial institutions (IFIs)
have been demanding such exercise since long. However, re-source constraints and political
considerations never allowed any government to move ahead on this path.
The World Bank and the Asian Development Bank are expected to finance
this process, provided the government successfully negotiates a programme with the
International Monetary Fund. IFIs often blame that assets held by Pakistani civil and
military bureaucrats are not compatible with their take-home incomes. In the late 1990s,
the World Bank conducted a survey of companies which revealed that a vast majority of
government officers took bribes, known as speed money, for moving the files even in
genuine cases. This was one of the prime tasks assigned to the National Accountability
Bureau (NAB). However, outcome of some moves in this direction are far from satisfactory.
Now it is expected that the government would attempt to clean up the system by sacking
such officials through the downsizing process.
To reduce the size of government and to cut costs incurred for running
it, the present setup is using the standard recipe of downsizing. Signals are unmistakable
that the country's new economic managers will trim and prune extra fat in the public
sector. Some public sector autonomous organizations, including banks, have already
undergone the downsizing exercise; others, in the provinces and in various public sectors,
have been selected.
The economic and management logic behind downsizing is strong. It is
doubtless that in these resource-crunch times a penny saved is a pound gained. Besides,
the public sector organizations are unwieldy, inefficient and overstaffed. Reducing their
size can result in better productivity. In any case, the present downsizing effort is a
continuation of the attempts made by earlier government in this respect. Comprehensive
roadmaps for downsizing were proposed by two committees, one headed by Syed Fakhr Imam and
the other by Dr. Hafeez Pasha.
But the whole process of downsizing, which is slowly beginning to take
shape, ought to have a human face. Slashing down nonproductive public expenditure and
improving government's performance by laying off the extra burden of needless staff have
to be weighed against the risk of losing skills and expertise. More importantly, it must
not be forgotten that government and public sector corporations have been the largest
employers in Pakistan. The 'load' they will shed will not be picked up by the private
sector, because the later is yet to create enough job opportunities for the unemployed. It
is unlikely, therefore, that it will absorb the additional workforce laid off in the
public sector. Downsizing would also require paying money under the golden handshake
schemes, which might in the short run level off the perceived benefits of the exercise.
This does not mean that downsizing should be shelved. There is a
certain inevitability about the process which cannot be escaped. What is being suggested
is that downsizing should ideally be a measure of last resort. Savings can be made by
strictly controlling wasteful expenditure on other heads in the ministries, government
departments and autonomous organizations. Enforcement of rules and institutional
discipline can increase performance. Restructuring can help deploy the currently
misapplied talent to its most productive use. These are better and less unpleasant
alternatives to the pressing need of making employees efficient and of justifying the
massive resources that are spent on government. Only after these options have been
exhausted that downsizing should be used as means to lighten the economy's weight of
nondevelopment expenditure. We should also keep in mind that people in Pakistan are
already faced with a horrifying spectre of unemployment. Tens of thousand of educated
youngmen are unemployed. For years now the avenues of employment veneration are drawing up
rather than growing. This is a horrifying spectre both for the country and its youth who
wait in despair and frustration for some kind of future but who neither have counsel nor
hope. The proposed large retrenchment would certainly add the dimensions of already