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Region

Future Uncertain

What’s at the end of the one-way tunnel that Pakistan is caught in?

By S.R.H. Hashmi | January 2021

Roosevelt hotel

The proposed disposal of Roosevelt Hotel is the symptom of a deadly disease afflicting Pakistan, which is getting deadlier with each passing day. It is extremely shocking for over people in the 80s like me, who have seen a developing, progressing and prospering build-up of state and private institutions in Pakistan.

Prior to partition, the part of India now forming Pakistan was basically known for agriculture and supply of soldiers to the British government. I remember before Eid in Lahore, we used to purchase ordinary cloth on ration cards.

However, under the guidance of committed leaders and competent, well-trained civil servants from undivided India, the country entered the industrial era. Institutions like Pakistan Industrial Development Corporation were formed which provided financial and technical assistance to those establishing new industries. Also, PIDC itself established and ran industries which did not attract private investors because of heavy capital outlay and long pay-back period, and privatised them when they became profitable. PIDC helped Pakistan become self-sufficient in many fields.

The transformation of Orient Airways, into Pakistan International Airlines Corporation was another success story. Due to competence and commitment of its early leaders, PIA expanded rapidly and even helped establish the aviation industry in the Gulf. The profitable airline managed to purchase the over 1000 room, prestigious Roosevelt Hotel in downtown Manhattan, through its own resources and ran it profitably for years.

However, the rise of greedy, corrupt politicians devastated state-owned enterprises. The institutions were deliberately run down by planting incompetent favourites to facilitate and promote corruption. Also, a large number of party workers were dumped into SOEs (state-owned enterprises), thus turning efficient, profitable institutions into big subsidy-guzzlers.

The corrupt politicians, whose greed and incompetence had destroyed the SOEs in the first place, now seem determined to make another killing by selling these institutions in a non-transparent manner.

rw lobby
One such SOE is Roosevelt Hotel in the US, which is again in the news for a possible sell-off, though the government denies it. The hotel has been profitable most of the time but did suffer primarily due to terrorism and Covid-19. Its closure has been announced, declaring it to be beyond redemption. And surprise, surprise, the outgoing US President has shown interest in its purchase, while Imran Khan’s trusted lieutenant Zulfi Bukhari enjoys close relations with Trump’s son-in-law, Jared Kushner, whom Trump had designated as his senior adviser on the Middle East, and whose efforts ended in Muslim states United Arab Emirates, Bahrain, Sudan and Morocco establishing diplomatic relations with Israel.

Coming back to the government’s privatization drive, it suffered a setback when the Islamabad High Court ruled that advisers and special assistants to the prime minister cannot exercise executive powers by being members or heads of government committees, which role can be played only by elected representatives. This imperilled Hafeez Shaikh’s position as head of the Cabinet Committee on Privatization, together with some other important committees. However, Federal Minister for Privatization Mohammed Mian Soomro can continue the process. Hafeez Shaikh has now been made Federal Finance Minister, which position will be regularized after his election to the Senate.

But this is not the end of the story. Abdul Hafeez Shaikh, after skipping two notices, has now received a third one from the National Accountability Bureau in respect of an old case. Also, the NAB has decided to investigate losses made by, and the reasons for the closure of the Roosevelt Hotel. According to news reports, NAB will look into the reasons behind the alleged loss of hundreds of thousands of dollars borne by the government. The accountability watchdog will also point out officials who allegedly showed carelessness in performing their national duties and failed to play a role in making the hotel profitable.

Imran Khan seems to be fast losing his grip on the government. It is a shame that despite his supposedly 22 years political struggle, Imran Khan could not raise even a small team of competent men of integrity, at least for important positions. That means even if a decision is made in principle to sell the Roosevelt Hotel, its implementation must be postponed in the national interest, to a time when the real estate market has stabilized and a transparent deal is possible.

In the meantime, the Pakistan Steel Mills transaction structure for privatization has been approved - despite Russian offer to expand and upgrade it - with 12,000 acres of its 18,600 acre land to be transferred to a newly-floated company, with plans to lay off over 4,500 workers. There is the future of Bundal and Buddo Islands too. Since no system of checks and balances exists, perhaps the get-rich-quick approach would be applied in respect of all this land. With the PTI foreign funding case and sugar and wheat inquiries getting nowhere, Imran Khan is forging ahead undaunted, claiming, and probably getting full support from the armed forces, completely oblivious of the situation within and around the region.

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