The world at present seems to be in an economic spin. The situation is especially grim for the developing countries, where inflation along with recession has hit the roof. Even basic necessities and services are being denied to the population. Right on top of it, the strong get richer by the day, while the disadvantaged are being put to the wall. According to ADB, developing economies are suffering from global meltdown and must reduce imports, while infrastructure building can spur growth. On the face of it, the issues may be of supply and demand, national productivity, foreign exchange reserves, direct foreign investments, availability or non-availability of imperative natural resources or food in the basket and incorporation of a particular principle of growth viz. consumption led or production led. But, it is primarily seen that the underlying issues are the role of governmental institutions, their effectiveness and the ultimate level of governance. What is the role of these institutions in the economic growth of a nation. Similarly, it also needs to be understood as to why effectiveness of these edifices is something of importance. And lastly why the standards of governance have anything to do with the economic growth of a country. Here reference can be made to the 2003 World Development Report which highlights the importance of institutions including such as property rights and the role of law for the efficient operation of markets and the sustenance and set-up of human made assets. That this report has emphasized the need for the creation of more institutions, if need be, to ensure an adequate supply of assets that are not spontaneously provided by markets viz. private sector, like clean water, clean air, fisheries and forestries, mutual trust through the set-up of a judicial system, ability to network and security of persons and property, further highlights the importance of mainly governmental institutions for economic growth. It is of even greater importance when it is implicitly said that the private or the corporate sector can only grow and sustain an appreciable level of economic growth, if it is relieved of obligations that should invariably be part of the public sector's domain. Explaining the matter, we see that clean water is to be ensured through WASAs (some experiments in privatizing this activity even in the developed world have met with disaster), clean air through governmental EPAs/EPDs, fisheries and forestries through policing by relevant federal and provincial governments and local bodies, judicial systems off-course are maintained by the representative governments, securities is ensured by the law enforcement agencies and so on. In a way, it can be said that without proper working of the above institutions, the market-oriented economy will not be able to yield positive results, no development can take place and consequently no economic growth would be evident. In other words, the economy would falter, stagnate and also fall to pieces. As the list of institutions also contain those tasked for providing health facilities, utilities like gas and power, services like railways and other modes of communications, infrastructure building organizations like the highways authorities, regulatory bodies akin to OGRA, NEPRA, PEMRA, PTA etc; hence, there is a need to delve into the present working of these departments in the Pakistani Context. In case we conclude that the same is lacking, then there should be a necessary requirement to come-up with the reasons for the lack luster performance. We see that these organizations are unable to deliver upto the expectations of the people/clientele and who have been clamoring since long for change. We also see that most of the educated consider correction of these organizations through privatization and nothing else. It, on the other hand, is extremely vociferous when the working of privatized entities like KESC is placed as a negative example along with the popular demand of Karachiites for the utility's re-nationalization. Here, the detractors of the public sector would come up with the working of PTCL and the various mobile companies, which according to them have been able to bring prices down by 80% during the last five years. In detail working and the disaffection with the working of PTCL and the truth that the mobile companies have only thrived on account of introduction of 3G technologies, leads to a stalemate. The experts, however, concede that the issue is competence and not really being in the public or the private domains. It is also concluded that the socio-political obligations of the state can only be discharged by the public sector, as the private sector cannot be made to share any of these burdens - rather, any such duties would only be taken-up at the expense of general efficiency and profitability. Case in point is the 1600 MW of so of captive power in the Country, and the private sector's inability to even use some portion of it to ameliorate the present power crises. And the reason for it is quoted as the high cost for self-generation and as such full leaning on utility power, but for some part where availability of gas leads to cheaper power for the sponsors. It is further seen that whatever one may say, economies can only prosper in an atmosphere highlighted by very effective governmental institutions and what is billed as good governance. Looking into the efficiency part of the public sector reveals that HRM and HRD is not properly understood and nor any efforts are being undertaken to correct the situation or the present drag. Additionally, it is seen that another of the negatives is continued hegemony of the non-professional against positions earmarked for the expert. Continued trite operations based on long redundant processes are also attributed to such management. A cursory glance at the working of the above organizations leads us towards another issue, which may have far reaching implications and could be considered as the main problem. These organizations are found to be out of sync with reality and the dictates of the time. Some consider the catching-up time, at today's level, to be at least forty years. Meaning there by, that the present arrangement has in fact forced us to remain backwards and then made us to live in a limbo since the last forty years. An area of special significance is that of regulatory administration, particularly for the financial sector, where fraud and unsound management have great de-stabilizing consequences for the economy. Actually, regulatory administration is the main instrument available to the government to enforce compliance with the nationally established standards in various economic and social spheres. More so, when all this has to be in line with the national development objectives. And, unfortunately, this may be missing in our context, which surely is affecting the economy in a negative manner. So much is this important that the Irish Government, a great proponent of privatization after the Thatcher years, has nationalized the Anglo Irish Bank, the Country's third largest bank and lender just last month. The financial wizards have considered this move as apt and most timely. If we consider all the above as correct, then efforts needs to be undertaken to ensure effectiveness of the governmental institutions in Pakistan. The first of the steps would be to let these work in accordance with their original TORs or charters. Thereafter, would be to allow these to be run through professionals instead of the normal placements. The third of the requirements should be to undertake serious HRM and HRD processes in these organizations and lastly to reduce the role of the outsider to policy-making, accountability and such pre-requisites alone. Furthermore, there should be adequate funding for capacity building of the institutions. The experts say that with correction of the present dichotomy and placement of the professional in his rightful position, the effectiveness of the various institutions will improve and so would be the relevant portion of the economy. Notwithstanding the dominant role of the private sector in Pakistan and a large number of Third World countries, both suggested and actual, the government's role in providing some public goods and services and in framing the basic rules of economic activity in terms of safety, protecting the vulnerable segments of society and maintaining a non-distortion policy including macro-economic stability is of great importance. The private sector is under no obligation at all to do any of the above, whatever corporate responsibility may mean. Similarly tasking or requiring it to provide even some of the services may be asking too much. In other words, governments and the public sector have to ensure that the economies do not fail and this in best done by recognizing areas of domain of both the public and the private sectors and then not encroaching on each other's turf The writer is MD PEPCO E-mail: cheema_tahir@yahoo.com