We need to objectively appraise the privatisation experience to date. PHOTO: FILE.
Part of the reason for the relative silence is the weakness of the labour movement. Workers of the SOEs slated for privatisation are arguably as big a stakeholder as any other in decisions regarding the future of their organisations. In the past, even the mention of privatisation was met with fierce resistance by organised labour. While trade unions continue to take up such issues from time to time, they no longer constitute a countervailing power to the nexus of government, IFIs and private business that champions the privatisation agenda.
Indeed, there is now hardly any organised force in Pakistan that can influence economic policy in favour of the working classes. The situation is similar in most other countries of the world. When the Soviet bloc collapsed in 1991, the academic and policymaking elite coined the term ‘There is No Alternative’ to indicate that all of the world’s people would have to accede to the logic of free market capitalism. More than two decades later, only a handful of countries have been able to break with the global trend, even though uninhibited ‘neo-liberalism’ has produced spectacular failures, none more so than the global financial crisis of 2007-08.
We, in Pakistan, are very far from being able to move beyond this. At the very least, we should recognise the imperative of initiating a debate on crucial policy issues such as privatisation. We need to objectively appraise the privatisation experience to date and then make bold policy decisions in the interests of the working majority rather than catering to every IMF demand.
Published in The Express Tribune, October 8th, 2013.
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COMMENTS (13)
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it is no more a silver The silver has been converted into dirt and garbage.I fully support privatization of these sick SOEs.Gov should privatize these enterprises with 75% shares including management to the private sector so that we could get rid of incompetent politically hired employees,officers and labour.
Problem is not privatisation but fairness and transparency. Going by PML(N)'s track record, the danger is that these would be sold to cronies at throwaway prices, citing their dismal financial condition and burden on exchequer.
Excellent comments guys! Where have you lot been all this time? The business pages could use more comments like these.
Anyway the idea that the govt. is going to be able to privatise 30+ SOEs is a joke. They can't get anything done. There has been no progress on the 3G auction and Etisalat dues from PTCL privatization. They've also rolled back electricity tariff changes for domestic consumers. So I think it would be a major achievement if they manage to privatise 4 SOEs in their first 5 years. 30 will take an eternity!
Good to know but i wonder why is the Government selling off the entities that are producing great profits and actually providing for the Balance of cash flows of the Govt. Budgets besides those semi govt. entities which are providing employment to thousands. I hope that only those entities will be sold out which are making losses and severely hitting the economy. A possible program can be to break these huge entities into smaller entities which will then be able to show their performance better. For those smaller entities that are making losses they can be then dis-vested but not all. These state owned entities is all the assets we have right now.......................
being a student of public administration, I once went through the history of PIA and that how it began business. it was an endeavor of a karachite family with the name of orient airlines. this enterprise helped most of gulf based airlines in their establishment. the current ordeal started as early as it was brought under government umbrella through nationalization. the only remedy to such ailing public sector entity is none other than privatization. by now we should realize that "something belongs to all Means it belongs to none".
rusted, rotten "silver"
Is this what passes for an op-ed? Some vague marxist populism but no understanding of how the IMF really works let alone the reasons and requirements for privatization? The IMF dictates some terms cause you borrow from them. Don't borrow and then no need to follow dictates. Secondly not all of their dictates are followed e.g. documentation and taxation. Third, is PIA really a bastion of worker unfriendly capitalism? With the world's largest employee to plan ratio I doubt it especially considering its making a loss and hence is a drain to the exchequer. It stretches the very definition of silver. Its more like the loser drug addict cousin who borrows or steals money while claiming next year he will clean up and repay everything. This money by the way to fund PIA's losses can only come from Govt. funds which right now will mean either a burden on existing over-stretched tax payers, new tax payers (yeah right) or IMF loans.
Silver? You mean lead block around the neck. PIA like Air India is a financial drain on its country because it will stay a play garden for politicians as long as it is not privatized.
We need to objectively appraise the privatisation experience to date and then make bold policy decisions in the interests of the working majority rather than catering to every IMF demand.
This is at best an incredibly naïve take on the challenges facing Pakistan and our government. It conveniently ignores the fact that we have to cater to IMF demands, since IMF is catering to us by keeping our economy afloat.
Pakistan's macroeconomic conditions today are such that we are incapable of servicing our external debt. Were it not for IMF's beneficence, we'd be in default. To give a sample of one small effect of such default: international banks would refuse to honour any letter of credit issued by Pakistani banks and all our imports & exports trade would be in jeopardy.
Pakistan cannot afford to ignore the IMF, just as we cannot afford to support our public-sector white-elephants like Pakistan Steel or PIA. Also, let's not delude ourselves with a romantic notion of these organizations being a workers' paradise. Incompetence and sheer theft by these public-sector employees have brought the organizations to their current state. Recent arrests of PIA staff for drug smuggling, being drunk, etc cannot be denied.
Pity the nation where family silver sells cheaper than dirt.
The sale of PIA certainly does not fall into the category of "Selling the state silver". If anything it is getting rid of garbage. If a seller can be found it might be possible to recycle this rubbish back to the silver it used to be in the days of Nur Khan. You should not overdramatise things. The days of state-owned airlines are over unless the state happens to be Dubai, Abu Dhabi or Qatar.
Part of the reason for silence against privatization may be weakness of labor movement. At the same time no action against the theft of tax payer money by state owned enterprises is absence of a tax payers movement.