PSUs playing key role in saving lives and jobs during pandemic: IMF blog

NEW DELHI: The pandemic has highlighted the role of the public sector in saving lives and livelihoods”. That might sound like something straight out of a left wing publication, but it’s actually the opening of a blog by officials of the biggest champion of privatisation, the International Monetary Fund (IMF).
Emblematic of how the world is viewing the public sector through new lenses thanks to the crisis, the blog post concludes that well-governed and financially healthy state-owned enterprises can help combat crises such as the pandemic and promote development goals.
Authored by a senior economist and two senior officials in the fiscal affairs department of the IMF, the blog post titled ‘State-Owned Enterprises in the Time of Covid-19’ adds that state-owned enterprises such as public utilities that provide essential services and public banks that provide loans to small businesses are part of that effort.
“Governments create the enterprises to meet specific goals and mandates, such as the provision of water, electricity, or transportation routes that the private sector would not find profitable. However, these mandates are often not appropriately funded, with consequences for people’s lives. State-owned enterprises are falling short in many developing countries, where more than 2 billion people remain without access to safe water and more than 0.8 billion lack reliable electricity,” stated the post published in IMF Blog.
The authors caution that to deliver on the development goals promised, many of these state enterprises needed further reforms, without which their cost to society and the economy could be large.