Former NIT chairman advocates privatisation

Says country losing Rs700b a year owing to loss-making national entities

LAHORE: As the government continues its struggle of selling stakes in state-owned entities, former chairman of the National Investment Trust (NIT) Tariq Iqbal Khan said that some elements have been trying to sabotage an already difficult task.

Khan stated that the country is losing around Rs700 billion annually in state-owned entities, making the case to privatise such units stronger.

The former chief of NIT said that nationalisation of banks in the 1970s played havoc with the financial sector.

“Non-performing loans soared as loans were sanctioned not on merit but on political grounds,” said Khan, addressing a group of journalists on Friday.

Khan quoted the example of MCB Bank that grew after being privatised.

“In the years to come, the banking industry was further reformed; regulations got stricter and vibrant. Consumers benefited and the environment became competitive.”

‘’All major political groups, including Pakistan Peoples’ Party, concede that nationalisation of industries and financial sector was a blunder; still many are reluctant to correct it through the privatisation of state-owned enterprises,’’ he added.

Khan said that the government is not equipped to deal with businesses. “It works through shared responsibility which is demonstrated in the decision making process carried out through the cabinet, assemblies, standing committees in assemblies, hence no single person makes a decision.”

In businesses, the boards are responsible for policy framework while executives are responsible to carry out day-to-day operations, he said.

“Nationalisation has not succeeded in any country,’’ he said.

Published in The Express Tribune, February 27^th,  2016.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.