Fair start of privatization plan remains a big task.

Byline: Syed Fazl-E-Haider

Present government led by Prime Minister Imran Khan has planned to privatize 48 public sector entities (PSEs) including loss-making Pakistan International Airlines (PIA) and Pakistan Steel Mills (PSM) during its five years constitutional tenure. The accumulative losses of PIA and PSM had surged to Rs400 billion and Rs200 billion respectively. The government would restructure the PSEs including PIA and PSM before their privatization, as no one would be interested in purchasing these PSEs in the existing conditions. The combined accumulated losses of PSEs eventually lead to sizable demand of budgetary resources. The present government has yet to allocate amount as privatization proceeds for the fiscal year 2019-20. Former government had allocated Rs 50 billion amount as privatization proceeds for the fiscal year 2017-18. The privatization and restructuring of key loss-making PSEs had been largely on hold.

Certainly, it is not the business of the state to do business. It is the private sector which has to run the businesses under the patronage and facilitation of the government. The government should only play the role of regulator and facilitator of corporate businesses. The privatization process should be transparent and on merit. Unfortunately, the process of privatization has ever been politicized in Pakistan. The political parties in opposition have been agitating against the official drive for privatization of state-enterprises. The people in the government actually provide the opportunity for political agitation against the privatization process when transparency and motive of the process becomes questionable.

Privatization is good if it is aimed at strengthening the private sector, improving the efficiency and service delivery of the state-owned enterprises (SOEs). The country privatized bulk of its SOEs in the second generation privatization carried out in the 1980s and 1990s. Since 1990, the country sold off 167 SOEs. During 1997-2000, the complete denationalization of the banking sector was carried out. In 2004, a privatization program was initiated by former prime minister Shaukat Aziz. Under Aziz, many of SOEs had been registered in stock exchanges of the country in order to promote business competition in the country. During the period from 2001 till 2008, the non-banking sectors were sold off.

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