On the mark
The appointment of chiefs of four public enterprises through free competition has reached its final stage. A three-member committee, set up to screen the candidates, is reported to have submitted to the Finance Minister probable names for appointment, along with its recommendations, for the Nepal Stock Exchange, Rastriya Beema Sansthan, Citizens’ Investment Trust, and the Employees Provident Fund. The government had advertised for the posts some time ago, and the Cabinet will make the final appointments. What is noteworthy is that all these four corporations fall under the Finance Ministry. Three persons have been short-listed for the final selection for each corporation, based on the business plans the candidates submitted and the interviews with them that were conducted. As announced in the Budget, the process for hiring has been started through free competition. The idea of merit-based hiring is laudable.
However, there are several ifs and buts. First of all, to have real and widespread effect, the idea needs to be applied by all the ministries. Several other corporations have received their chief executives through direct political appointment without any vetting of the candidates for their suitability. If such a process is to be applied on the initiative of individual ministers only, as in the present case, rather than as a government policy to be universally adopted, the impact can be very limited and the longevity of such effort will be in doubt, too. In the past, sporadic attempts had been made to hire chief executives through competition. The nine-month-long CPN-UML government in the 1990s had experimented with this idea in some of the corporations. But it was not made a universal policy. Nor did the successor governments generally follow it. Besides, the performance of such appointees was not regularly reviewed, either, to decide on reward or punishment for them, or to decide whether to retain them. Therefore, the idea, basically a sound one, did not have the intended result.
While the importance of appointing competent chief executives is always relevant, one of the main problems that has been afflicting Nepali public enterprises is its faulty ownership structure. The government should decide which of the public corporations must be retained under full state ownership and which should be divested, and why. It is wrong for the government to try to run manufacturing and commercial enterprises, which must be strictly run on business principles. Whereas, generally speaking, no government in Nepal has not been able to run its own ministries and departments in a fairly efficient manner, it makes no sense on its part to try to take on added burdens. Unless this problem is addressed, government enterprises cannot be expected to register considerable improvements on their performa-nces. During the first years of the post-1990 period, several public enterprises were transferred to private hands in a way that led to widespread accusations of fishy deals, thus giving privatisation a bad name. While trying to make the best of the present situation to tone up the performances of the public enterprises, the government needs to give enough thought to the importance of finding a permanent solution to the main problems of ailing public enterprises.