gender differential paper IJCRB

ijcrb.webs.com
INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS
Impact of Privatization on Performance of State-Owned
Enterprises in Pakistan
JUNE 2011
VOL 3, NO 2
Muhammad Akram, Hassan Mobeen Alam
Hailey College of Commerce, Faculty of Commerce
University of the Punjab, Lahore – Pakistan
Muhammad Saleem, Abdul Aleem & Muhammad Ali Raza
Hailey College of Commerce, University of the Punjab, Lahore – Pakistan
Abstract
The purpose of this study was to investigate the impacts of privatization on the
performance of the state-owned enterprises in various sectors of Pakistan. The approach to
this paper was to find out the answers of the research questions such as, "What was the
background of Privatization in Pakistan?", “What were the basic needs of Privatization in
Pakistan?", "What were the effects of Privatization on the performance of various
institutions in positive as well as negative manners?" and "What was the impact of
privatization on banking sector of Pakistan?". By answering these questions conclusions of
this study was drawn about Privatization in south Asian Countries especially in Pakistan
and this study acknowledged that privatization is a very useful strategy by the government
of Pakistan which has a positive impacts on overall performance of corporate bodies and
economy of the state with some counter effects on working and labor conditions. Many
options has explored in this study for future studies related to various aspects of
privatization of many other sectors in Pakistan and many other developing countries as
well.
Keywords: Privatization, Nationalization, Impact of Privatization on Banking Sector.
1. Introduction
Privatization is a way to re-allocate the resources and functions of public sector to private
sector and it seems to be a cause which plays an important role in the mission for growth
(Filipovic, 2005). Savas (2000); Shah, Haroon-Ur-Rashid, Ullah, and Ahmed (2009) stated
that privatization, also called denationalization, is a process in which ownership of the
enterprises is transferred to private sector from the government. Moreover, Megginson and
Netter (2001) reported that privatization is deliberate sale of state-owned enterprises
(SOEs) to private hands by a government. According to Aftab and Nasr (2008), there is a
lot of difference between the government and private owned enterprises’ performance and
assumed that private ownership performs better then government. Kikeri, Nellis, and
Shirley (1992) believed on this fact that the share of government tenure is going to be
reducing due to increasing trend towards privatization of various enterprises in developing
countries. Subsequently, Joshi (1999) told that when a lucrative public sector enterprise
sale out to general public, it attracts others to take interest in privatization process.
Yoganandan (2010) reported that Pakistan has adopted the ‘economic liberalization’ not as
a policy for development but as a requirement imposed by International Monetary Fund
(IMF) and World Bank and privatization process has faced strong resistance from political
entities and trade related unions. The political wagering, the panic of losing jobs and giving
additional benefits to nears and dears created havoc to the privatization process
(Yoganandan, 2010). Initially, the privatization was considered as an economical issue but
later on it became the part of some political hindrances over the country’s real assets
COPY RIGHT © 2011 Institute of Interdisciplinary Business Research 834