History of Privatization in Pakistan
“Privatization is the act of reducing the role of government or incoming the role of private sector, in an activity or in the ownership of assets.” The policy of privatization has been used for improving the efficiency and profitability of improving enterprises, which are not performing well. The privatization of government owned enterprises is now a days a large-sale process for the transfer of state owned enterprises to the private sector. Privatization use as an instrument for development of the industrial sector in developing countries and throughout the world. Privatization in 1947-1958
Pakistan founded in 1947 with the historical traditions of a free and competitive private sector. At the time of partition the public sector consisted only of the railways, telephone and telegraph department, the post offices, the Karachi port, radio Pakistan and some coal and salt mines. The concept of privatization is not new to the policy make of this country. It may be followed as back as in 50s; When Pakistan Industrial Development Corporation (PIDC) was established in the country in 1952 to boost up the industrial development in the country, which in favor of the privatization. Privatization in 1958-1969
The private sector policies continued under the region of Marshal Ayub Khan’s government that ruled Pakistan from 1958 to 1969. In this period we saw first expression of privatization as a public policy tool. When some industrial units that included jute, paper and sugar mills that were setup and successfully run by Pakistan Industrial Development Corporation (PIDC) were disinvested to the private sector. But political and economic fallout of the 1965 and 1971 war was surprisingly well weathered by the private sector and the economy of Pakistan continued to grow and gain to this. The flow of western aid and the rising importance of Pakistan as a major domino in the cold war were important to support the economy and the private sector during their period. Privatization in 1972-1977
The era of Zulfaqar Ali Bhutto was the era of nationalization, which moves the whole economy in the first half of 70s, was reversal in 1977. From 1972 to 1977, when Pakistani people party’s Government State a broad nationalization program under the concentration of wealth that had occurred under the private sector led model of the 1960s and ensuring the meeting of basic needs of all citizens that is “Roti, Kapra or Makan.”The government policies during this period followed the socialistic development model. These politics kept restrained and bounded the private sector with finally disastrous results. In 1972, 32 basic industries and 3 life insurance companies were nationalized: in 1973, 26 vegetable ghee companies; and in 1974 all domestic private sector bank and remaining insurance companies were nationalized along with petroleum market and shipping companies. In 1976 flour mills and cotton factories were nationalized and rise husking units were nationalized in 1977. By 1976, however the same forces that had powered in the wave of nationalization and an ever expanding the public sector role in the country, realized that they may have gone too far. It was however too late. The damage to the private sector had been done. In fact the economy began to slow down in preceding years. Privatization in 1977-1988
The government of General Zia-ul-Haq that came into power in 1977 began the process of control the huge and expanding public sector and regaining the confidence of the private sector. The first major legal attempt to restore the confidence of the private sector, the transfer of Managed Establishments order that was announced in 1978.This order provided legal cover for the return of the nationalized units back to their owners. In this era, all the rise-husking units, flour mills and cotton ginning units were denationalized along with two light-engineering units and a steamship company. 4 Pakistanis industrial...
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