In her first speech at the house of elected representatives, Thatcher will announce the immediate privatisation of many state-owned enterprises like Pakistan Steel Mills, PIA and PSO. CREATIVE COMMONS
ISLAMABAD:
It is June 2013. Pakistan has survived five years of economic recession, the worst power breakdowns, two disastrous floods, bloody violence and deepening ethnic polarisation.
After a successful democratic transition in Islamabad, a newly-elected government has just been sworn in under the leadership of Margaret Thatcher and she has vowed to take the country on the path of economic recovery and growth.
In her first speech at the house of elected representatives, Thatcher will announce the immediate privatisation of many state-owned enterprises like Pakistan Steel Mills, Pakistan International Airlines and Pakistan State Oil. She will sell these enterprises after a global tendering process, regardless of the nationality of the bidders.
Showing her staunch resolve to save hard-earned taxpayer money from going to waste on paying salaries of an inefficient workforce, she will not care much about the valuation debate, which back in 2006 had undone the entire privatisation agenda in the case of Pakistan Steel Mills.
That step alone will save the federal government half a trillion rupees, which will be spent on direct and targeted aid to the poor and improving infrastructure, including the railways.
In the same speech, Thatcher will also announce the privatisation of all power distribution companies and declared the creation of an energy market with multiple buyers and sellers. She will dissolve the National Transmission and Dispatch Company and the Pakistan Electric Power Company with immediate effect, thus decentralising energy procurement and distribution.
Thatcher will also promise stronger defence of the country, but will count a stronger economy as a prerequisite. She will increase the defence budget and immediately order the purchase of reconnaissance aircraft for Pakistan Navy, which were shamelessly lost without resistance to terrorists a few years ago.
At the same time, Thatcher will withdraw any concessions provided to army-run commercial enterprises like the National Logistics Company. She will say, “War is too serious a business to be left to generals.”
Thatcher will be equally harsh on lawless labour unions and rent-seeking commercial enterprises. In her first speech, she will not only declare curtailment of the powers of the unions but will also announce withdrawal of all kinds of quotas, SROs and protective measures taken for large local industrialists. She will earn the scorn of both politicised workers and wealthy elite but will grow a thick skin towards them.
Caring about children’s education, and not so much about job creation for teachers, Thatcher will announce and successfully convince provinces to reallocate the hefty education budget from sustaining a large bureaucracy to empowering the poor families through vouchers. The poor will thus choose a private school and ensure reliable education for their children.
Thatcher will announce withdrawal of all kinds of support prices for agriculture output. She will disassociate the government from procurement of commodities and will trust the market, including the infamous middleman, to deliver.
In her speech, she will also announce dissolution of the Pakistan Agriculture Storage and Supplies Corporation and the Trading Corporation of Pakistan.
Turning away from the decades-old industrial policy, Thatcher will announce an immediate dissolution of the Engineering Development Board. She will say, “competitiveness will come from open competition, not through more protection.”
She will end the monopoly of the Japanese car market in Pakistan and will withdraw heavy tariffs on automobiles. She will celebrate the globalising products made in Sialkot and will denounce state-fed industrialists from Faisalabad.
Thatcher will announce the formation of a special committee to deliberate on the dissolution of the Planning Commission, the Ministry of Commerce and the Ministry of Industries and Special Production.
Thatcher will turn the strategic depth argument on its head by opening and expanding trade with Afghanistan and will welcome Afghans as investors in Pakistan. She will build a business partnership on ethnic relationships instead of war-mongering.
She will announce her first foreign trip to be made to Afghanistan to lay grounds of an economic foreign policy. In her trip, she will be accompanied by businessmen, not generals. In the same trip, she will also reach an agreement with Kabul to stop supporting terrorists on each others’ grounds.
In her first speech, the Iron Lady will declare a complete roadmap to Pakistan’s prosperity.
Flash backwards. It is April 2013. Elections have been announced and candidates have been declared. Although we do not see any iron lady in top leaders here, there should not be any doubt that we need the same level of conviction, clarity of thinking and hardheadedness amongst the men and women on the top. We want nothing short of a complete economic restructuring; and as our history tells us, we have limited choice in terms of choosing leaders for this purpose.
The writer heads PRIME, a free market economy think-tank based in Islamabad
Published in The Express Tribune, April 15th, 2013.
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COMMENTS (17)
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Crux of the author's assertion boils down to two issues. One, role of the government & the other is competitive resource allocation. What I understand that he has not discounted the role of the government in provision of key public goods, such as security & targeted subsidies to deprived sections of the society. And sufficient evidence is available on record that when state gets involved in resource allocation, it results in greater wastage & rent seeking.
It also cannot be denied that nexus between big business & government emerges with government engaging itself in resource allocation. Solution is that focus of State policies should be 'Pro-Market' not 'Pro-Business'.
It is not government's business to run business. Businesses thrive only when competition is there. They become more customer oriented and offer better prices. Government run businesses are shameful sins that are used as political trump cards to provide jobs to political workers and ultimately become painful stab at the back and also at front of economy.
Alas, Pakistan has no brave breed of politicians to take actions described in this article. But that is today, tomorrow when we go for elections, it is our duty to elect those who are brave enough to work for Pakistani citizens in the interest of Pakistan!
I commend you on your creative approach. I enjoyed the read even if I found it wishful thinking. The article recognizes the need to focus on the economy and take some strong decisions especially pertaining to trade and our neighbors.
Since I am not a proponent of "absolutes", e.g. an absolute privatization approach or a particular economic or social theory or "ism" approach, I don't agree with some of recommendations of Thatcherism. I think we need to be more responsive and mindful of our context, recognize the vested interest groups and how they work together. We also need to recognize that no state institution whether army or executive is of itself either "good" or "bad". We clearly see how in politics and government,it is a group or groups of power brokers who enable a single executive to sustain for a certain period.
Thatcher was a creation of her times, she had her pluses and minuses and taught the world several lessons. Personally, whereas one can admire her for her courage and directness, I find her highhanded decisions as lacking prudence and cognizance of the fact that UK was a strategic player of the global economy. As such UK needed to be more responsible and visionary in its decisions pertaining to economy and post cold war decisions. Any how a thought provoking, and ironical read.
@Proletarian @Jamal
You are requested to carefully look at the history of both economies when Reagan and Thatcher took reigns. Both countries were on steep economic downturn- US struggling with stagflation and UK mired in lawless labor unions and loss making state enterprises. Thus it needed an act of faith to reverse the conditions, which both leaders successfully did. No populist had the guts, though both leaders actually took decisions without loosing confidence. Thatcher was so successful that even later day Labour Party governments could not reverse the economic order she had created. Don't forget she was thrice elected. If Friedman were to visit queues at our CNG stations today, he would have made same prescription he gave to Reagan. Just withdraw price control. Price controls mis allocate resources. Please visit Chile today. You will find Chile as economically most stable country in the region, with poor more happy there than in late Chavez Bolivia.
On China, it is too soon to comment. We live in a mature political order under parliament and constitution-not a single party authoritative rule. Our authoritarian rulers made us worse off and real economic reforms were actually started in democratic regimes. Ultimately, society grows under a spontaneous order, and all planning is just quackery.
I am not sure which agri subsidies are you talking about? Is there any? All subsidies to agriculture including fixed tariff for tube wells have been taken away by successive govts. I encourage the writer to go visit a typical village in Punjab to see how agri sector is being decimated with no support from govt.
I kept on wondering during the entire article if the author seriously meant what he penned down; it seemed more of an ironical discourse. Anyway, Lady Thatcher, despite having been elected thrice, was an English disaster! She, along with Ronald Reagan, were true disciples of Milton Friedman and wanted to put the entire state on sale! The mayhem began in 1973 in Chile when the socialist President Salvador Allende was overthrown by infamous General Pinochet, giving impetus to so-called 'Miracle of Chile'! Friedman later found friends in US and UK, and helped put poor in the grave! So thanks but no thanks! We must find other ways of improving our state-run businesses, not sale them and kill the, though only proverbial, idea of 'Welfare State'!
Instead of increasing the profitability of the state insitutions by enforcing a strict curture of merit you'd have them sold to foriegn industrialists and the trust cut-throat capitalism and the bussiness elite to solve the problems in society? Unchecked, free maket capitalism is like a society on auto-pilot, its like a headless chicken. It creates poverty, it is an ideolgy than sees inflation as a good thing and is hostile to the idea of abundance, the cheap abvialablity of goods. In reality cheap availablity of goods is the thing that people really need. It increases financial inequality, which polarises society and the emphasis on competition instead of cooperation results in the rise of racism and sectarianism. This is insane. It was Thatcherism and Reganism that led to the current recession, which has led to the bankrupcy of the west.
We should look towards China which is constantly expanding it's profitable owned assets instead of the west and emphasize strengthening and educating our population. We a should build a strong and intelligent state instead of further weakening it. A democratic state which represents and works in the interests of the working class and the producers should be the strong line of defence for soceity against poverty and illiteracy.
Recession is when there is a negative growth rate. Our growth rate has been a lousy 3% average in past 5 years. We have not been in recession just low GDP growth rate.
Why are we Pakistanis getting so excited / emotional about Thatcher. I live in England and i see more hype about her in Pakistan than in England. No one really cares you know ...
Pakistan needs no such leader who was a disaster for her own country. She was, along with Reagan responsible for unrest in so many countries. Please stop portraying her as a symbol of strength and accomplishment. She was neither.
Free market capitalism in Pakistan? You can't get us to even consider for a moment such a thing. We just want free stuff for everyone forever. Why is that so hard?
All strength to your elbow, Al(i) Greenspan. Even if half the things you recommend are done, it will be a revolution.
Totally rubbish!
You left out the part where Thatcher brings the military under the control of the Civilian Govt - firing the top brass to make it clear to the public who's in charge. Thatcher would then direct the military to eliminate the militants, eliminate the blasphemy law, reinstate YouTube, institute a fair tax system, and repair the international image of Pakistan.
Excelling article. Would like to be surprised even if the next government does half of what your hypothetical Margaret intends to do.
Wishful thinking
I totally disagree with article. I think Thatcher would be most unsuccessful politician in Pakistan.