Tag Archives: public sector

Why Words Matter

Posted on 15 May, 2013 by | Leave a comment
Created with WordItOut.

Created with WordItOut.

Researchers have recently identified 23 words they term “ultraconserved,” meaning they haven’t much changed since the end of the Ice Age 15,000 years ago. These words—mother, man, fire, worm, and spit, among others­—sound and mean the same in most Eurasiatic language families. The most commonly shared word is “thou” – the singular form of “you”. Imagine that. Among the nearly 700 languages in these families, stretching from Great Britain to Western China, the Arctic to southern India, all of them share a very close version of this word.

Words matter because they allow us to communicate clearly. A decade ago, no agreed-upon phrase existed in Arabic for corporate governance, making debate and reform difficult. An issue can’t be addressed if it can’t be clearly defined. To that end, a CIPE-led effort resulted in the first standardized term for “corporate governance” in the Arabic language: hawkamat ash-sharikat. Developing a common term opened the door for broad-based dialogue on corporate governance in the Arab world.

Sometimes it seems that CIPE has its own language. Look at the word cloud above, created from CIPE’s 2012 Annual Report. Democracy, business, governance, public sector, private sector. These words are probably familiar, but it might not be immediately clear how they work together.

If you look at it more closely, however, you’ll see they are parts of a fully functioning, democratic, free market society. All of the pieces move together—an empowered, informed electorate can hold its government accountable. A strong private sector forms the engine of job creation and economic growth within a society. A true democracy is dependent on its citizens, its private sector, and its government to act in good faith and with good intentions.

Words matter for what they represent. The words in the image above represent the hard work of CIPE’s partners over the last year. Their stories and successes are inspiring, and we hope you’ll take the time to read about them here.

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Posted in Global

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Pakistan Inches Towards Reforming Public Sector Enterprises

Posted on 15 April, 2012 by | Comments Off

Participants at the roundtable on corporate governance of public sector enterprises in Islamabad. (Photo: CIPE Staff)

“The government was determined to enhance the efficiency of public sector enterprises (PSEs) by restructuring their boards and appointing professional heads of these organizations, mostly from the private sector, in order to make the entities profitable institutions.”

– Dr. Abdul Hafeez Shaikh, Finance Minister of Pakistan

Pakistan’s loss-making public sector enterprises (PSEs), also known as state-owned enterprises, are a major cause of economic concern. This year, ccording to official estimates from the Ministry of Finance, eight major PSEs received more than  US $3.5 billion in support from the federal government, which is higher than the federal component of Pakistan’s development budget. According to the Ministry of Finance, “Inefficient public sector enterprises are draining fiscal resources and choking the economy.”

A major reason that these companies lose so much money is a low level of transparency and poor governance; but historically, any discussion of the governance of Pakistan’s PSEs was taboo. Successive governments used these companies to provide jobs to their supporters. Moreover, non-transparent financial transactions continued to drain resources while reducing PSEs’ operational efficiencies.

Understanding the political sensitivity of the issue, CIPE’s Pakistan team has taken a subtle approach to the reform of PSEs, with patient efforts aimed at generating a debate on the importance of a introducing a code of corporate governance for PSEs. These efforts began to yield results when, on CIPE’s advice, the Ministry of Finance constituted a taskforce in October 2011, comprising a wide range of stakeholders, including relevant ministries with ownership of PSEs, private sector representatives, the Securities and Exchange Commission of Pakistan (SECP), the Pakistan Institute of Corporate Governance, and others. The taskforce became the driving force behind a productive debate. As a result of several meetings and a consultative process, on March 22, the SECP released new draft regulations for PSEs.

Recognizing Pakistan’s unique regulatory framework, under which ministries are the owners of relevant PSEs, existing codes of corporate governance were not sufficiently relevant to these firms to ensure local buy-in. Instead, CIPE advised the taskforce to develop a homegrown solution that would still be based on international best practices. After careful consideration and study of international models, a technical committee appointed by the taskforce prepared the draft regulations to correspond to the complex reality of public sector enterprises in Pakistan.

“The draft regulations have been designed in view of the distinct governance challenges faced by the PSEs. Recommendations made in the draft regulations include measures to optimize efficiency, enhance the transparency of operations, and provide a mechanism for accountability of management.”

– Securities and Exchange Commission of Pakistan

The draft regulations are now available on the SECP’s website for review and comment.

In order to generate further public debate, and to build awareness about corporate governance of state-owned enterpises, CIPE also assisted the taskforce in organizing Pakistan’s first major roundtable on governance of PSEs, on April 10 in Islamabad.  This event received an overwhelming response, with over 125 participants from various PSEs attending. Moreover, a subject which, as mentioned, was previously considered taboo in Pakistan, received extensive media coverage.

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Posted in South Asia

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Creating Jobs in the Times of Crisis

Posted on 15 July, 2009 by | Comments Off

Looking at the impact of the global economic crisis on the Arab world, the new issue of the Arab Reform Bulletin published by Carnegie brings up a number of important issues that will resonate far beyond the region.

Particularly interesting is the piece on reform prospects in Egypt.  From public dissatisfaction with dire economic conditions and a widening gap between the have and have nots to an expanding public sector in light of tight fiscal conditions, Egypt certainly faces some tough reform choices in the coming months and years.

Not only in Egypt, but elsewhere in the world, governments are facing a difficult choice.  As economies continue to contract or stagnate, the ranks of dissatisfied with socio-economic conditions swell.  In countries with little diversification and weak safety nets, people who lose jobs face few opportunities besides taking it to the streets in protest, turning to survival entrepreneurship, or even embracing criminal means of generating income.  For many governments, the only practical option seems to be opening up the public sector coffers and providing employment or subsidies — something they ultimately can’t afford, especially in the times of crisis.

Just thinking about creating private sector jobs in the times of crisis can get depressing (see South Africa and the challenges of permanent unemployment), but it is possible.  For instance, in many emerging markets, just reducing the levels of corruption and extortion to lower the pressure on business, might do the trick.  However, instead, in countries like Russia, we’ve seen the opposite – corruption pressures intensifying, putting companies out of business entirely and destroying jobs in the process.

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Posted in Africa, Eurasia, Middle East and North Africa

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