Country Report Pakistan
- ID: 2101420
- February 2016
- Region: Pakistan
- 25 Pages
- The Economist Intelligence Unit
On February 2nd at least two people were shot and killed and eight injured in clashes between security forces and Pakistan International Airlines (PIA) employees on the outskirts of the Jinnah International Airport in the city of Karachi.
Paramilitary troops used gunfire, tear gas, water cannon and baton charges to prevent protesters from reaching the terminal building, although some of them were able to enter the airport cargo area. The government is pressing ahead with ambitious plans to privatise loss-making public sector enterprises that weigh heavily on the federal budget. Divestment is also a key condition of the IMF's budgetary support programme, which has stabilised the government's finances since 2013. However, selling off a stake in the flag carrier is controversial and politically sensitive. Although the government seems determined to proceed, it is likely that labour agitation will continue and affect the government's privatisation timetable.
For decades PIA was a symbol of national pride, a view that is still widely held despite its failing performance. Competition from regional carriers and private domestic airlines, egregious political interference, and failure to adopt new management techniques have contributed to the PIA's economic decline over the past decade. The policy of the previous Pakistan People's Party (PPP) administration (which ruled from 2008-13) of providing manifold jobs at the airline for loyalists means that the carrier's workforce is hugely bloated.