The federal cabinet, under the Chairmanship of Shahid Khaqan Abbasi, has upheld its earlier decision to dissolve the "Engineering Development Board (EDB)" operative under the Federal Ministry of Industries and Production (MoI&P). In May last year, the Cabinet Committee on Energy (CCoE), headed by Khaqan Abbasi - the then Minister of Petroleum - had decided to dissolve the EDB on corruption grounds. The federal cabinet on July 13, 2017 endorsed the decision of the cabinet committee. Minister for Industries and Production, Ghulam Murtaza Khan Jatoi too has supported the dissolution of EDB. His ministry, however, is reported to have put up a supportive summary, underscoring the need for having an entity that is designed to foster technological development, promote R&D and create an enabling innovative environment with quantifiable and empirically observable metrics based on key performance indicators. It further stated that by virtue of the Board's technically-proven background, it possesses a cutting edge capacity to augment and enhance the engineering base of Pakistan and is designed not only to serve as the regulatory arm of this Ministry, but it is also tasked with examining and scrutinizing all the MoUs related to trade policy, engineering practices and knowledge sharing for the Ministries of Commerce, Foreign Affairs, Defense and the Board of Investment (BoI).
The most supportive argument reported to have been put up by the Ministry is related to indigenous automobile industry which has matured well, arguing that in the last three decades the automotive market was dominated by PAMA (Pakistan Automotive Manufacturers Association) members only. With the formulation of the new ADP 2016-21, Pakistan's automotive market is now based on an even and competitive playing field with participation from Japanese, Korean, Chinese and French OEMs.
The country's auto industry has expressed astonishment at the decision of federal government which is reported to be the prime beneficiary of the R & D by EDB specially that related to the deletion program for the assembly of foreign-branded vehicles in Pakistan. EDB, working closely with the vehicle assembly plants, had been regulating and providing some legitimacy to the deletion programme.
To trace the background of EDB, one has to go back to the late 1970s when the need for regulating and promoting the engineering industry of Pakistan and export of engineering goods was felt. It resulted in the establishment of the "Expert Advisory Cell (EAC)" in 1979 as a Techno-Economic arm under Federal Ministry of Production.
Whereas, in 1995 "Engineering Development Board (EDB)" was established under the Cabinet Division as an autonomous and independent body. In the year 2000, the government placed EDB under the Ministry of Industry, forfeiting its independence. In 2004, the EAC was merged with EDB. The mandate awarded to EDB was ambitious and challenging which included:
- Strengthen the engineering sector of Pakistan and integrate it with the world market to make it a driving force for the economic growth of the country;
- Prepare a long-term vision for the development of the engineering sector of Pakistan;
- Formulate and coordinate all government policies related to the engineering sector;
- Develop over-all strategic engineering development plans of Pakistan;
- Promotion of export of engineering goods; and
- Management of deletion policy with specific reference to automobile industry.
EDB had been overseen by prominent and highly accomplished experts of Pakistan. They included Razzak Dawood, the Chairman of Descon Engineering and former Federal Minister of Industry and Production and Akram Sheikh former Deputy Chairman of Planning Commission of Pakistan.
The question how far EDB has delivered on its given mandate has no easy answer. Pakistan is nowhere on the map of engineering goods exporting country. The county has no strategic engineering development plan nor a vision nor specific policies for the engineering sector of Pakistan. The contribution somewhat is in the automobile assembly deletion programme.
One thing is absolutely clear that EDB became a victim of poor governance and ultimately turned into a burden on the national exchequer. But, same or worse is the status of nearly all the business-related entities in the public sector, including PSM, PIA and power utilities, whose accumulated losses are estimated to be around Rs 3 trillion on account of poor governance and corruption.
The problems of poor governance in public sector entities, including EDB, are so pervasive that their restructuring has, time and again, proved to be an exercise in futility. Their closure or sell-off is the only viable solution. But the incumbent government was not inclined for such bold steps. Let's see what the new government can do about it by the year end.
The same holds true for the public sector entities operative under over 20 Federal Ministries spearheaded by 20 federal ministers and almost an equal number of Minister of State and Advisors enjoying the status of federal ministers. Under these ministries operate hundreds of entities - the purpose of whose existence is questionable.
(The writer is former President of Overseas Investors Chamber of Commerce and Industry)