“The greatest obstacle to discovery is not ignorance — it is the illusion of knowledge.” —Daniel J Boorstin. If entertainment channels could somehow improve their content, perhaps there might not be any incentive for a couch potato to fiddle with the remote and end up viewing torturous talk shows, which completely zap the brain in the noble guise of national interest. Even worse is the tendency of these talk shows to offer an analysis on subjects as diverse as international affairs and the workings of the Central Bank, which is rather mystifying since hardly anyone in the history of this world can be credited with having complete knowledge of either subject. In most cases, the attitude while sitting in front of the idiot box is broadly ‘in one ear out the other’ either because the assertions are fantastic or the topic is irrelevant for the working masses. Logically, how can analysts residing in Pakistan arrive at an accurate assessment of the intrigue surrounding international breaking news, as an example Syria, especially when developments back home are shrouded in mystery with hardly anyone knowing what is going on? Pertinently, most predictions by analysts and gurus never come true. Frankly, if anyone could actually predict the future, making money might be a better option compared to prophesising on a talk show. As regards relevance to the masses, to rephrase a quote by an unknown Chinese I read somewhere a while ago, “What is the big deal about voting? In the US everyone can do it and only half the people do it.” To ‘analyse’ the quote, the reason they do not vote is because, they do not care! Albeit, the Chinese gentlemen ascribed another reason for the low turnout but that would have been censored anyway. Nonetheless, once in a while, a discussion does capture attention primarily when it is related to a comprehensible subject and, for an accountant, nothing is more intoxicating than a discussion on financial statements. This is why a particular comparison between a privatised bank and a state owned bank, on a popular channel a few days ago, was rather fascinating. The anti-climax, however, after a limited comparison of a few balance sheet items, was the rather assertive conclusion that privatisation was better than public ownership in every case, even beyond the banking sector. Talk about comparing an orange’s peel with an apple’s seed. If privatisation is the elixir for everything, let us sell the Central Bank; imagine what profits it can earn under private management. Sometimes, there are more important things than just making money! Moving on, regarding the analysis in the subject talk show, four things need consideration. First of all, considering that financial statements of all banks are available in the public domain, carrying out a detailed accounting comparison of the banks to refute the conclusion derived is child’s play for an accountant. Albeit that would only complicated and polrise the debate. The point being made is that four or five operational statistics and/or financial numbers cannot provide an all encompassing conclusion; only a detailed financial as well as economic analysis, perhaps extending to social and development objectives, can form the basis of any reasonable insight. Is an accountant qualified to make such an observation, not that being qualified has ever stopped anyone making any comment? For the record, since most of the world is obsessed by the prowess of McKinsey in management, the founder, James O Mckinsey, was a professor of accounting at the University of Chicago before he opened the firm. Quoting big names definitely lends credibility! Secondly, the selection of the balance sheet assertions triggered an auditor’s inherent scepticism. One entity or the other might have made more profits in 2013, but who made more profit on an absolute basis over the decade since the one was privatised, is a more comprehensive analysis. Which entity paid more taxes over the entire period, what was the government’s net financial gain all through and, finally, what is the government’s current share in net equity in absolute terms? Why limit the exercise to absolutes? Let us extend it to a discounted cash flow scenario. Even if the decision is to be based on a limited analysis, let us focus on a bank’s core business; which entity had a higher advances portfolio at the end of 2013 and, on that basis, decide whether to privatise banks or not. However, hang on for one minute more. Should there not be an analysis as to why a bank apparently performs better in the private sector compared to one in the public sector? Is the layman not just a bit curious what the private management did to turn around the bank and why can this not be replicated in the government bank? Sure, overstaffing is always showcased as the culprit, but let us lay the argument to rest for all eternity by calling for an independent analysis under the technical assistance of the multilateral donors; definitely an interesting case study! However, wait another minute! If the difference is only due to overstaffing, than why blame the bank? This cost can always be ignored in any profitability analysis. After all, providing employment, which is any government’s prime directive, is a better strategy than making profits in the bank and then distributing cash to the needy. Thirdly, how can an analysis of two banks establish a principle for all other sectors? This brings to mind an amusing comment by a dear friend on the show: apparently the value of shares in national telecom has depreciated significantly since its privatisation. Perhaps it might have been better to sell the company in entirety back then, notwithstanding that the actual proceeds have still not been fully received; the point is, if the company is less profitable after privatisation then, by the same token, can we conclude that privatisation is bad in each and every case? Finally, on a net foreign exchange flow basis, beyond simple profitability, was the privatisation to foreign investor’s positive, on a case-to-case basis and on an overall basis? How many dollars were brought in at the time of sale and how much have been taken out ever since, under any classification? More importantly, how much more will continue to be exported for times to come? To conclude, dear readers, sweeping statements can hardly be prescient in today’s age and time, especially when Google search can provide data and analysis at a click? What is rather troubling is that this particular debate on privatisation has been going on for quite a number of years and there has never been a serious attempt to prove whether or not the nation historically gained from privatisation or lost, and whether results are different for different sectors. Why do the donors not take an initiative around this debate, rather than pushing the Washington consensus all the time? Privatisation most likely is a great solution but perhaps a better course of action is to make well-informed decisions on a case-to-case basis. A bit of light hearted banter at the end: can a government be privatised to the highest bidder? And if so, who is currently the most qualified person, including the population of global leaders, to be shortlisted? Have a good laugh dreaming up a candidate! The writer is a chartered accountant based in Islamabad. He can be reached at syed.bakhtiyarkazmi@gmail.com and on twitter @leaccountant