Utility stores and policy consistency

The USC has been on the privatisation list approved by Council of Common Interests since 1997 during the PML-N regime.

Last weekend, Prime Minister Raja Parvaiz Ashraf visited the Aabpara outlet of the Utility Stores Corporation (USC) in Islamabad to launch the Ramazan package. In 2006, prime minister Shaukat Aziz and cabinet colleagues Jehangir Tareen and Tariq Azeem visited the same outlet for the same purpose. This is an annual ritual performed by all prime ministers. There is, however, an interesting difference between the visits of the aforementioned prime ministers. The present prime minister can claim that he was honouring a corporation set up by the founder of his party, Zulfikar Ali Bhutto, in 1971. In the high inflation times of mid-1970s, following the first oil shock and the economic consequences of the disintegration of what then was Pakistan, lower income groups were protected through an income and prices policy. Created initially by taking over 20 retail outlets of the Staff Welfare Organisation, the USC became an important instrument of price moderation.

What prompted Shaukat Aziz — despite his vows to liberalise, deregulate and privatise the economy — to make this populist visit without any protocol? He even paid the bills of some customers from his own pocket and promised to open a utility store in each of the 6,127 union councils. When he was finance minister in the largely technocratic cabinet under president Pervez Musharraf, a summary was moved to privatise the USC. It had been on the privatisation list approved by the Council of Common Interests in 1997 during the PML-N regime. It is another matter that the party’s government in Punjab now keeps out-competing the federal government in Ramazan packages.

Anyway, the summary in question was placed before the meeting by Razzak Dawood, the industries minister, though, normally this is done by the secretary of the ministry concerned. Echoing the views of Shaukat Aziz, the minister made a passionate speech that business is not the business of the government, much less the retail trade. His regret was that his own secretary, Tasneem Noorani, though he signed the summary as per rules, did not agree with its recommendations. Noorani’s experience in the districts led him to believe that the move was unnecessary. He was supported by Dr Shahid Amjad Chaudhry, deputy chairman of the Planning Commission. My own point was that the government cannot just make speeches when the situation gets out of hand. Having deregulated most prices, the government must have some relief mechanism in times of crisis. Persistent denial of government support had already brought the USC to near-collapse. The matter went up to Musharraf who had more political sense to stop the privatisation move. The USC survived but its operations were restrained until Shaukat Aziz became prime minister and had to take into account political considerations.

One cannot accuse the PPP of consistency either. While the Privatisation Commission continues to have the USC — a private and not public limited concern — on its list of upcoming transactions under the policy of public-private partnership announced in 2009, the adviser to prime minister on industries and production announced in May last the plan to open 2,000 more utility stores. The USC management has set itself the target of 5,000 new outlets to cover all districts, tehsils/talukas and union councils. At present, the number is 6,012 and the USC even intends to open some mega stores. Its example shows that politicians and technocrats are equally prone to policy inconsistency.

Published in The Express Tribune, July 20^th, 2012.