Who Owns Pakistan - Yimg

Privatization - Turning the Clock Back
"A government too soft on big business, is bad for economy, as a
government too harsh on big business"
A Scottish Proverb
Privatization was advocated as the magic cure for Pakistan's economic woes by
both Nawaz Sharif, the spiritual heir to military dictator Zia ul Haq and Benazir
Bhutto, wearing the political mantle of her socialist father whom she and her
party now call Shaheed (martyred) Bhutto. Both championed privatization on the
plea that public sector enterprises being inefficient and corrupt were a drain on
government resources and their sale help bridge the budget deficit, by curtailing
the government expenditure and by using the proceeds of privatization for retiring
public debt.
First Nawaz government in 1990 argued that " in economic terms, government
has suffered a cumulative loss of Rs 27.8 billion on the operations of
corporations under the Ministry of Production and resultantly, the inefficiency of
public sector has deprived the national exchequer oflarge amounts of funds
which would have contributed to the social sectors and industrial growth."
"The government believes that one of principal benefits to the nation from
privatization of its public assets is by the way of reduction of our debt burden.
The burden of domestic and international debt can be reduced from the sale of
those very assets for which the debt was created" the second Benazir
government in 1993 argued.
Privatization took-off earnestly in Pakistan on January 11, 1991 with the sale of
Muslim Commercial Bank and seven years down the road, 90 units, including
three financial institutions and a power plant had been disposed off. In addition
12 percent shares of Pakistan Telecommunication Corporation, 10 percent
shares of Sui Nothern Gas Pipeline (SGNPL) and 10 percent shares of PIA have
been divested.
Nawaz Sharif had marked 115 units for privatization in 1991 and thus more than
90 percent of the assets so slated originally have been sold-off, without making
the slightest dent in the foreign debt and budget deficit or achieving the stated
objectives of privatization. Yet officials and government leaders continue to
hammer the point that the accumulated debt and budget deficit could be
decreased through accelerated privatization.
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