The privatisation problem

Should govt decide to privatise any national asset, it must find proper buyer, ensure completely transparent process.

The privatisation process in Pakistan stems from years of mismanagement, negligence and corruption by successive governments, leading to the current predicament where ‘national assets’ are almost certainly in need of a miracle or privatisation. The government has only two available options: it must either properly restructure our national institutions (which has failed in the past) or privatise them. Should the government opt for the former option, the burden shall remain on it. The latter option appears more possible, but this comes with its own demons such as finding a suitable buyer through a transparent process and overcoming self-created red tape and hurdles.

The government should not look towards the privatisation past of other countries as examples as these countries never had transparency issues and their socioeconomic conditions were totally different. In Pakistan, our ‘national assets’ (e.g., PIA, Pakistan Railways and Pakistan Steel Mills, to name a few) have been run to the ground over the last many years and hence, these can no longer, at this stage, be termed ‘assets’. They may eventually become assets, but not today. The government is left with no option but to privatise as unfortunately, local capabilities of the ruling elite seemed to have repeatedly failed.

Let’s expand even further on this. The government shifts focus away from the fact that these institutions have been repeatedly mismanaged by the same persons who have repeatedly held power. Due to high levels of corruption and low levels of accountability, these institutions have been crippled and now the government is crying that privatisation is the only way forward. Whether true or not, the government must acknowledge that it is the ruling elite who have failed us and that surely privatisation may appear to be the only viable option. I am not referring to the poor punter whose name appears on a charge sheet somewhere before an accountability court, but the real culprits who have never been brought to justice for their sins of plundering. This will bring some semblance of credibility for the next step, which would be trying to find a suitable buyer of the national asset in question. The government has never once explained how it intends to get a suitable buyer for our national assets? Just because it may find a buyer does not mean the buyer will be capable of running such an institution. The only or the highest bidder may not be a suitable buyer. These are national assets having significant impact on our peoples’ daily lives and so the government cannot simply sell them to the highest bidder just because someone is willing to meet the purchase price. It is due to the lack of transparency and trust (justifiably so in my opinion from observing the past track records of our governments) that the courts have intervened, trying to ensure that there is no impropriety. I do not believe that the already burdened courts particularly crave this parental role but with rampant negligence and rumours of corrupt practices rife (based on past incidents), the courts, when they intervene, are actually the only institution safeguarding our national assets.

This government needs to work hard to understand and resolve the conundrum which it, along with past governments, has created. Our national assets are haemorrhaging by the minute and this needs to be cured and not merely bandaged. Therefore, it remains imperative that should the government decide to privatise any national asset, it must find the proper buyer and ensure a completely transparent process. Once this process starts becoming successful, eventually the citizens and institutions will begin to have faith. This is an ongoing process but will hopefully result in future success.

If the privatisation problem is not handled extremely cautiously, the public at large will be at the mercy of private corporations; the government must make certain these corporations serve the best interests of the peoples.

Published in The Express Tribune, February 26^th, 2014.

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