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Contents
Nationalization and Privatization in Pakistan ............................................................................................... 2 Introduction .......................................................................................................................................... 2 Brief History of Nationalization................................................................................................................. 3 The First Phase (1971-77) ......................................................................................................................... 3 The Second Phase (1988 to Present) ........................................................................................................ 3 How Nationalization was opposed?...................................................................................................... 4 Defensive Arguments ................................................................................................................................ 4 Privatization .................................................................................................................................................. 5 The First Phase of Privatization (1989-1993) ............................................................................................ 5 The Second Phase (1993-1999)............................................................................................................. 6 The Third Phase (1999-2012) ................................................................................................................ 7 How privatization is actually perceived? .............................................................................................. 8 How it was opposed? ............................................................................................................................ 8 Conclusion ................................................................................................................................................. 8
Introduction
Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector whereas Nationalization is the opposite of Privatization which is defined as Takeover of privately owned corporations, industries, and resources by a government with or without compensation. Common reasons for nationalization include (1) prevention of unfair exploitation and large-scale labor layoffs, (2) fair distribution of income from national resources, and (3) to keep means of generating wealth in public control.
But Ms. Benazir Bhutto did not completely carry out the process of denationalization programme. There was no privatization of the nationalized units. But somehow limited scale privatization occurred during her reign. Most importantly, the UBL Pakistan and railway association was nationalized during the reign of Ms. Benazir Bhutto which made her party strengthen the government control on Pakistan Railways and Pakistan Steel Mills. Then in 1998, the then PM Nawaz Sharif ordered the cessation of state owned enterprises and corporation under the ownership of Government control. From 1999 to 2010, there was no nationalization phase until 2011. The nationalization programme was once again initialized by Prime Minister Yousaf Raza Gillani on December 15, 2011. The reason behind it included the inclusion of government ownership in Pakistan Steel Mills, Pakistan Railways as well as Pakistan International Airlines. The nationalization programme keeps on getting restructured to be made more profitable while remaining within the ownership of government control.
Defensive Arguments
However the Pakistans People Party defended the concept because they thought that it protected the rights of workers and gave high priority to the workers themselves. Most importantly, it created a sense of realization of self-awareness among the workers. It also created a suitable, fair and healthy work environment.
Privatization
In Pakistan, large number of public sector units have been privatized which include the following sectors: 1. 2. 3. 4. 5. 6. Telecommunications Banks Thermal power stations Production, prices Efficiency, Investment Employment and fiscal deficit
Privatization genuinely means denationalization of nationalized units. It was first initiated by Mr. Nawaz Sharif in order to strengthen the economy of Pakistan and profit seeking business. This was then continued by Shaukat Aziz who privatized 80%-90% industries during the ending days of this tenure.
were returned to the deserved owners which included Eittefaq Group of Industries to Mian Mohammed Sharif whilst others remain under government control. On 22nd Jan, 1991, Privatization took place on a large scale. Firstly it started with the denationalization of banking sector, starting first with MCB Bank Limited. This privatization programme was aimed at private savings and investment and to accelerate the economic growth. The 2nd phase was initialized by the then Finance Minister of Pakistan named as Sartaj Aziz in order to transform the publicly owned enterprise to profit seeking business. The mega corporations such as WAPDA, KESC and PTCL were privatized. From 1990-93, almost 115 industrial units were privatized which included the privatization of two major banks and 10% Shares of Sui Northern Gas Pipelines Limited.
second phase of the privatization programme were immediately ended by Prime Minister Nawaz Sharif until his government was ended in 1999.
6.4%8.6% a year
The end of 2007 initially halted the privatization programme in the country. The Supreme Court issued an order for the denationalization of Pakistan Steel Mills. This put an end to Mr. Aziz's intensified and aggressive privatization programme at the end days of his tenure.
Conclusion
There should be a strategy to promote Privatization in Pakistan. There should be strong elite commitment for privatization at political and bureaucratic level. Then this commitment should be translated to vision and mission as to why Privatization is needed in Pakistan. The main intention would be strategic sale and management control while also serving the rights of workers and consumers. There should be awareness campaign about the privatization of an entity to the public and inform them of the pros of doing so. Sale should be made of certain percentage of shares to public to create
private ownership. Hence there should be transparency to be the cornerstone of privatization process by strengthening the regulatory framework.