Privatisation in Pakistan

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The poverty expenditure rate statistically dropped to 34.5%—17.2% in 2008 as part of the privatisation programme.

The Privatisation process in Pakistan

nationalisation programme in 1970s— an inverse of the privatisation programme.[4]

In the period of the 1970s, all major private industries and utilities were put under the government ownership in an intensified programme, called the

Pakistan Peoples Party
in 1977, although a commission was set up by General Zia-ul-Haq government but no denationalisation programme began until 1990.

The privatisation programme was launched on 22 January 1991

private ownership of enterprises by Prime minister Shaukat Aziz.[7]

Privatisation (Spontaneous phase: 1989–1993)

The privatisation programme launched in Punjab which had the higher GDP growth than any province of Pakistan.

The momentum and demands for denationalisation gained currency towards the end of the government of Prime minister

N.M. Ukailie.[4]
However, only three industries were returned to its rightful owners, namely Eittefaq Group of Industries to Mian Mohammed Sharif whilst others remains under government controlled.[4]

Nawaz Sharif lacked Bhutto's chrisma but he countered Bhutto's ideology, by imitating him. In many ways.... he imitated Bhutto better than Bhutto's own daughter Benazir.

— Tripod Publications, Cited source[4]

As an aftermath of

Punjab Province Nawaz Sharif who presided the liquidation of many industrial units put under provisional government to private sector.[4] All industries based on Punjab government ownership were returned to its rightful owners on a mutual understanding; the prices on units returned to industrialists are still kept as "top secret" by the provisional government.[4]

Nawaz Sharif.

A large-scale privatisation programme was launched on 22 January 1991 as the primary economic policy by

MCB limited.[11] Sharif termed his privatization programme as "turning Pakistan into a (South) Korea by encouraging greater private saving and investment to accelerate economic growth.".[12]

The second phase was promulgated by

Pakistan Telecommunication Corporation were set off to private sector. From 1990 to 1993, around 115 industrial units were hastily privatised, including the privatisation two major banks, 68 industrial units and 10% Shares of Sui Northern Gas Pipelines Limited.[12]

The privatisation programme came with great surrounding controversies with lacked competition as the programme was largely controlled by favoured insider.[13] The recklessness and favouritism shown in privatisation of the industrial and banking units by Prime minister Nawaz Sharif was to become the hallmark and the rise of strong business oligarch who have concentrated enormous assets, further increasing the wealth gap in Pakistan and contributing to the political instability.[14]

Privatisation phase (1993–1999)

In 1992, the

other was buying."[16]

After

financial collapse.[15]

The first attempt was made to privatise the

United Bank Limited but the proposal met with great hostility by the workers union and opposition.[18] Proposals were also made to put the private-ownership to Pakistan Railways but it was rebuffed by Prime minister Benazir Bhutto who quoted: "Railways privatisation will be the "black-hole" of this government. Please never mention the railways to me again."[15] The economic growth declined when the US embargo began to bite the government of Benazir Bhutto.[18] By the end of 1996, ~20 industrial units, one financial institution, one electric power plant and 12% shares of Pakistan Telecommunications Ltd. were privatised by Benazir Bhutto.[11]

The second phase remained continued until 1998 when it was abruptly ended by Prime Minister Nawaz Sharif after imposing economic emergency after ordering to

Indian nuclear aggression.[19][20] All stock exchange, stock markets and the second phase of the privatisation programme were immediately halted by Prime minister Nawaz Sharif until his government was ended in 1999.[19]

Privatisation (intensified phase: 1999–2008)

Shaukat Aziz.

After the

economic relief after 2001 also played an important role in strengthening the patronage-based industries financially and physically.[21]

In 2004, Aziz became Prime minister and initiated an intensified privatisation programme in order to grow the GDP rate annually.[22]

Aziz forcefully and aggressively pushed 100% privatisation of state-owned corporations while virtually planned to privatised 85% of banking sector.[23] Starting from 2003 until 2007, Aziz successfully privatized 80%[23] of the banking industry into private-ownership enterprises, while privatizing the numbers of shares of Pakistan International Airlines and other mega-corporations into the public circles.[23]

Nothing is sacred... We are packaging up our companies. (....).... These state-owned corporations (SOEs) have been well-run for the past few years.... and now we are offering them to investors from all over the world....!

— Shaukat Aziz, 2006, source[23]
The intensified privatisation programme led the economic boom of Pakistan's economy which was at the range of 8.96%–9.0% in 2004.

Intensified privatisation policies had major impact on public sector organisation which diminished with the privatization of the state-owned corporations. Prime minister Aziz defended his privatisation programme as he maintained that "these institutions viable while they were on the verge of collapse.". Aziz's privatisation programme subsequently improved the country’s growth rate by 6.4%—8.6% a year. Inflation rate dropped to 3.5% in last 3 years as against 11–12% in 1990. However, in the end of 2007, Aziz's privatisation programme suffered a major set back which initially halted the privatisation programme in the country.

Supreme Court halted the privatisation of Pakistan Steel Mills after transferring the inquiry from FIA to NAB, while issued standing orders to keep the Steel Mills under the nationalization programme.[25] The proceedings and Supreme Court's decision initially halted Aziz's intensified and aggressive privatisation programme at the end days of his tenure.[25]

Privatisation Fiscal Year 2021

The government will likely fetch Rs100 billion in fiscal year (FY21) through the privatisation of state-owned entities said Privatisation Minister Muhammadmian Soomro.[26]

Initial work for the privatisation of power distribution companies and State Life has been started while the privatisation of Haveli Bahadur Shah Power Plant in Jhang and Baloki Power Plant in Kasur, two RLNG-based power plants, was in the final phases.[26]

On 26 August 2021, Services International Hotel in Lahore was auctioned at the highest bid of Rs1.951 billion.[27]

Public perception

The privatisation programme still marks the question of "big" controversies.

poor get poorer.[28]

But on the other hand, a significant support for the privatisation programme has been raised in the

microeconomic efficiency as opposed to macroeconomics.[30] Overall, the GDP rate grows smoothly with privatisation programme remains in effect as opposed to nationalisation programme that it had dropped the GDP growth rate of Pakistan, Dawn maintained.[30] Major proposals were made to privatise the major and most-profitable industries of Pakistan, namely the Pakistan Railways (PR) where The Express Tribune argued that the national railways' condition has gone from bad to worse under government ownership, and only privatisation programme can save the railways with the creation of sense of competition that would drive improvement.[31]

Adversary opposition

Despite its success, the public sector organisations, labour and workers unions remained extremely hostile towards the privatisation programmes.

Pakistan Telecommunication Company Ltd (PTCL).[32] Despite the demonstrations the state-corporation was privatised by Shaukat Aziz which resulted in workers’ losing their jobs.[32]

In 2012, an unsuccessful attempt was carried out by current government of Pakistan Peoples Party when the government sought to privatise the mega-state corporations, particularly the power sector; major nationalised industries such as

PEPCo were proposed by the finance ministry to privatise the power distribution companies.[33] Major worker's strike were initiated by the central labour unions, and after receiving much criticism, his government halted the privatisation programme of energy sector, and nationalised the remaining power sector industries due to public pressure.[34][35]

The

Pakistan Peoples Party's intellectuals remains skeptical about the privatisation programme and targeted the controversial implementation on numerous occasions.[36] The peoples party maintained that "an elitist or top-notch educational system" which exceedingly comprises private sector’s foreign affiliated schools and universities, has built the "sole source" of producing some proficient minds. While on the other hand, the privatised Madrassah system of education has been patronise different sects of religion, patronise different sects of religion, and further exploited as source of religious extremism and associated with terrorist outfits and their offshoot.[36] The private sector education system negative effects of private sector education and it hashas created a disparity between the rich and the poor.[37]

Dr. Professor Athar Maqsood of

National University of Sciences and Technology (NUST), set forward his argumentative thesis that there are two reasons behind why the privatisation has not been successful as was originally perceived are economic reasons and socio-psychological and political reasons.[38] In the 1990s, the privatised enterprises have laid off employees by introducing schemes like golden hand shake.[38]

See also

References

  1. ^ "Privatization Commission". Ministry of Informationa and mass-media broadcasting. The Electronic Government of Pakistan. Retrieved 2 June 2012.
  2. ^ Khan, Mubbsher Munawar; Mohammad Zafar Yaqub; Farida Faisal; Muhammad Asim Khan (4 April 2011). "Privatization in Emerging Markets: Pakistan's perspective". Punjab University Department of Business and Commerce. Punjab University Press. Retrieved 1 June 2012.
  3. ^ Akbar, Bilal. "Privatization in Pakistan". Bilal Akbar. Retrieved 2 June 2012.
  4. ^ a b c d e f g Press Release. "Nawaz Sharif's privatization". Nawaz Sharif's privatization.and Report. Retrieved 1 June 2012.
  5. ^ E-Govt. of Pakistan. "History". Privatization Commission of Pakistan. The Electronic Government of Pakistan. Archived from the original on 23 October 2012. Retrieved 1 June 2012.
  6. ^ a b Press. "Business Oligarch of Pakistan". Tripod nuclues. Retrieved 1 June 2012.
  7. ^ a b Malcolm Borthwick (1 June 2006). "Pakistan steels itself for sell-offs". BBC Pakistan, Malcolm Borthwick. Retrieved 30 May 2012. Pakistan has had the most broad-based structural reform of any country in Asia. Last year, we were the second fastest growing economy in the world after China. We grew at 8.4%
  8. ^ See Nationalisation in Pakistan
  9. ^
    ISBN 0-313-28025-8
    . Retrieved 10 April 2014.
  10. ^ Bokhari, Syed Anwar-ul-Hassan (18 September 1998). "History and Evaluation of Privatization in Pakistan" (google docs). Pakistan Federation of Trade Unions. National Seminar on Privatization. pp. 5–8, 10. Retrieved 1 June 2012.
  11. ^
    ISBN 92-64-15310-1
    . Retrieved 1 June 2012.
  12. ^ a b Abdus Samad. "The Economic Policies of the first Nawaz Sharif Government 1990–93:Privatization". Dr. Abdus Samad, Author of "Governance, Economic Policy and Reform in Pakistan". Author of "Governance, Economic Policy and Reform in Pakistan". Retrieved 1 June 2012.
  13. ^ a b Press unknown. "Big Cover up in Corruption in Privatization". Tripod Publishings. Retrieved 1 June 2012.
  14. ^ US Govt, United States Government (April 1994). "The Government of Nawaz Sharif". United States Government. US Department of State :Case Study. Retrieved 1 June 2012. Benazir and the PPP, criticized Nawaz Sharif's efforts at privatization, calling them the "loot and plunder" of Pakistan and saying his plan favored large investors and ran roughshod over labor
  15. ^
    ISBN 8176481572
    .
  16. ISBN 8170997003
    .
  17. ^ a b Muhammad Ali Siddiqi (13 April 1995). "MOU worth $6bn signed". DawnWireService (April13th 1995; from the United States). Retrieved 20 November 2011.
  18. ^ a b Staff Reporter. "Concern over UBL sale move". October 11, 1995. UBL Dawn Wire Services Management. Retrieved 20 November 2011.
  19. ^
    ISBN 978-1-61039-021-7.[permanent dead link
    ]
  20. ^ "DAWN Profiles". Dawn. Retrieved 19 October 2011.
  21. ^
    ISBN 978-0815715023
    . Retrieved 1 June 2012. shaukat aziz and privatization.
  22. ^ Weber, Tim (29 January 2005). "Pakistan pushes India on pipeline". BBC Pakistan Business Editor, BBC News website, in Davos. BBC. Retrieved 1 June 2012. Better economic relations between India and Pakistan depend on both countries joining forces to build a gas pipeline to Iran, Pakistan's prime minister has said.
  23. ^ a b c d Borthwick, Malcolm (1 June 2006). "Pakistan steels itself for sell-offs". BBC Pakistan Asia Business Report editor, BBC World, Port Mohammad Bin Qasim. BBC Pakistan Directorate. Retrieved 1 June 2012. Pakistan's only steel company, created more than 20 years ago with Soviet technical expertise and financial help, has come full circle after being sold last month to a Russian-led consortium.
  24. ^ Ahmed, Naveed (27 March 2007). "Privatisation of Pakistan Steel Mills". Political deception. Retrieved 30 May 2012.
  25. ^ a b Mudasser Aziz (16 May 2012). "Steel Mills corruption case: SC transfers inquiry from FIA to NAB". The News Tribe. Archived from the original on 21 May 2012. Retrieved 30 May 2012.
  26. ^ a b TLTP (28 September 2020). "Privatisation likely to fetch Rs100bn this year: Soomro". Profit by Pakistan Today. Retrieved 30 September 2020.
  27. ^ Ahmed, Amin (27 August 2021). "Privatisation Commission auctions Lahore hotel for Rs1.951bn". DAWN.COM. Retrieved 27 August 2021.
  28. ^ a b c Zafar, Shaukat Masood (6 March 2012). "Globalization Pushing Towards Diseased Pakistan". The Pakistani Spectator. p. 1. Archived from the original on 13 April 2014. Retrieved 2 June 2012.
  29. ^ Kiani, Khaleeq (12 March 2012). "Privatisation questioned". Dawn Newspapers, 12 March 2012. Retrieved 2 June 2012. Pakistan has sold a total of 166 state-owned enterprises for Rs476.5 billion since 1990 to finance budget deficit, cut losses and improve efficiencies of the mismanaged entities through privatisation aimed at spurring economic growth and job creation.
  30. ^ a b Khan, Nasr Ullah (16 March 2011). "Privatisation needs to happen now". Dawn Newspapers, 16 March 2011. Islamabad, Pakistan. Dawn Group of Media. p. 1. Retrieved 2 June 2012. y Pakistan's economy is in dire need of privatisation which must also include large and inefficient public sector organisations that are depriving the national exchequer of huge sums of money year after year.
  31. ^ Ansari, Adeel (12 January 2012). "Privatisation can save Pakistan Railways". The Express Tribune, 12 January 2012. Retrieved 2 June 2012. It seems that the damage done to the railways system by our lack of leadership and management has not crippled the institution just yet – the prime minister has just announced a business class service to be offered from February 3, 2012. This is not a novel idea, but a good one nonetheless
  32. ^ a b c Vilani Peiris & Keith Jones (4 June 2005). "Pakistani workers revolt against PTCL privatization". World Socialist Organization. Retrieved 1 June 2012.
  33. ^ Staff Reports (24 January 2012). "Wapda staff goes on strike". Dawn News, 24 January 2012. Retrieved 13 May 2012.
  34. ^ Our Correspondent (6 May 2012). "Wapda workers' protest enters 6th day". Dawn News 6 May 2012. Retrieved 13 May 2012.
  35. ^ Press (13 May 2012). "WAPDA strikes ended". Jang News Group (Urdyu). Archived from the original on 13 May 2012. Retrieved 13 May 2012.
  36. ^ a b Akhtar, Suleman (2 November 2010). "Bhutto's nationalization policy: A response to PM Gilani's statement". The Directorate for Press and Public Relations of the Pakistan Peoples Party. The Directorate for Press and Public Relations of the Pakistan Peoples Party (Akhtar). p. 1. Archived from the original on 30 May 2012. Retrieved 1 June 2012.
  37. ^ Nishapuri, Abdul (1 November 2010). "Was nationalisation policy measure programme a mistake?". Abdul Nishapuri, Directorate Press for Public Relations of Pakistan Peoples Party. Directorate for the Press and Public Relations of Pakistan Peoples Party. p. 1. Archived from the original on 6 September 2012. Retrieved 1 June 2012. Under Nationalization programme, Zulfiqar Ali Bhutto gave hope and honour to Pakistan's poor and downtrodden people.
  38. ^ a b Staff reporter (2 March 2012). "If Rs300b spending on PSEs stops Govt can control budget deficit". The Nation (Pakistan). Retrieved 2 June 2012.

External links

  • E-Govt. "Privatization Commission". Ministry of Informationa and mass-media broadcasting. The Electronic Government of Pakistan. Retrieved 2 June 2012.

Sources

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