Articles of the year 2005

Creative Accounting
November 18th, 2005

It is only very recently that I have come across the expression Creative Accounting. I naturally assumed it to be a third world concept, where separate sets of books are maintained for the various interests, ie Income Tax, Govt bodies etc. However, in Pakistan it seems the books are doctored by the Government agencies themselves. Invariably they are used to portray the Minister, or the department in a more favorable light. This is certainly so in the case of PIA. Every time a new Chief Executive takes over, the figures are trotted out to show 1) the load factor is now 80%, and 2) The Revenue increased by 1.5 Billion Rs for this quarter over the same period for last year. This makes for interesting reading, and shows how quickly a new CEO can turn a company around, or is there a special accounts officer to do the new masters bidding. The upturn in PIA's fortunes has been a feature of every new appointee, and if they are to be believed then PIA should rank amongst the top airlines of the World, improving vastly with every new chief. However, sadly this is not the case and PIA seems to be drifting ever so surely into deeper losses. Perhaps there is a new creative director put in charge who churns out figures that should be in a Harry Potter film.

For a company that is closing routes, once considered lucrative, and the envy of other International Carriers---- the Heathrow slots for instance, now down to thrice weekly from Karachi. The management has moved some of its flights to Lahore and Islamabad, to accommodate traffic though some smaller in number, but more powerful in circles that matter. This goes against the whole concept of the central hub, from which the long haul flights are launched. The hub is situated at the Head office of the Airline where the fleet is based, so that Aircraft can be changed, if required, at short notice without disrupting the schedule. All the other airports feed the hub, and these flights are timed to deliver the maximum passenger load to the hub. The departure of the long haul flight is timed to give the shortest connection, thereby keeping the joining passenger happy. In fact Airlines make it a point to advertise their 'immediate connection', 'quick connection' as a plus feature. All Airlines try to ensure that they can mount daily flights to a destination, and build the traffic to multiples from the hub. PIA has launched two flights to Nairobi, from Karachi. With no sizeable Pakistani population in Nairobi, seems a fruitless exercise. No doubt the creative accountant has put together impressive figures to justify this and other similar flights.

Meanwhile, the President has done well to cancel the bullet-proof Mercedes that were on call for the various Govt ministers, and sub-ministers. Rumour has it that one Minister insisted on his car being Earthquake proof, and that was that. Surely President Musharraf should take this belt tightening a little further, and have a study done to calculate why every Government functionary is traveling with and given police protection. Even a Deputy Commissioner, can be seen with an escort. In the Punjab several cases have been reported of Ministers thrashing citizens, and I would seriously suggest to the President that it is not the Minister or his relatives that need protection from the citizens, but we poor citizens that need to be protected form these Ministers, who by virtue of their Ministerial guard naturally assume that they have the right to exercise this Government given might on the local populace. Mr President, traveling in a normal car without his official guard, a Minister would think many times before getting out of his car to 'settle' an argument himself. If he got away with it once, he surely would not be foolish enough to try it again. It is the visible Government power that the Minister assumes has been given him for his personal use, and not just to protect him, that leads to a power intoxication, causing the damage. The country can well do without these crude displays of power, and I do have a suggestion that might solve this problem. If a Minister, or any Government officer thinks he is deserving of this service, then he should pay for it out of his own pocket. It will immediately show how much value the protectee puts on his own life. He may take to traveling incognito, which will be of great service to us all.