Privatization of Public Sector

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“Privatization is presented as being the only alternative to an inefficient, corrupt state. In fact, it is not a choice at all... it is a mutually profitable business contract between the private company (preferably foreign) and the ruling elite of the Third World”

Arundhati Roy

ISLAMABAD: Pakistan has lost an unbelievably high amount, more than Rs8,500 billion (Rs8.5 trillion or US$94 billion), in corruption, tax evasion and bad governance during the last four years , Transparency International Pakistan (TIP) claims. The News,Front Page,5 Feb 2012.

ABBREVIATIONS
ADB Asian Development Bank
CMDP Capital Market Development Program
CPS Country Partnership Strategy
DFI Development Finance Institution
FDI Foreign Direct Investment
GENCOs Generation Companies
GCI Global Competitiveness Index
GDP Gross Domestic Product
GDR Global Depository Receipt
GoP Government of Pakistan
HBL Habib Bank Limited
IFI International Finance Institution
IMF International Monetary Fund
IPO Initial Public Offering
IPP Independent Power Producers
MCA Monopoly Control Authority
MTDF Medium Term Development Framework
KESC Karachi Electric Supply Corporation
KPT Karachi Port Trust
KSE Karachi Stock Exchange
NCBs Nationalized Commercial Banks
NEPRA National Electric Power Regulatory Authority
NHA National Highway Authority
NICL National Insurance Company Limited
NRL National Refinery Limited
OGDCL Oil and Gas Development Corporation Limited
OGRA Oil and Gas Regulatory Authority
PC Privatization Commission
PEMRA Pakistan Electronic Media Regulatory Authority
PPID Pakistan Private Infrastructure Development
PPL Pakistan Petroleum Limited
PPP Public Private Partnerships
PRCL Pakistan Reinsurance Corporation Limited
PRSP Poverty Reduction Strategy Paper
PSA Private Sector Assessment
PSD Private Sector Development
PSO Pakistan State Oil
PSM Pakistan Stock Market Fund
PSO Pakistan State Oil Company Limited
PSOD Private Sector Operations Department
PTA Pakistan Telecommunications Authority
PTCL Pakistan Telecommunications Company Limited
REITs Real Estate Investment Trusts
SBP State Bank of Pakistan
SECP Securities and Exchange Commission of Pakistan
SLIC State Life Insurance Corporation
SME Small and Medium Enterprises
SOE State Owned Enterprise
TA Technical Assistance
UBL United Bank Limited
WAPDA Water and Power Development Authority
PRIVATIZATION OF PUBLIC SECTOR
INTRODUCTION
1.The world economies have gone through many experiences. Seventy years back there was much praise and appreciation for nationalization, impressed by the wave of Socialism in the world which was considered to be the panacea for all ills. But as Socialism collapsed nationalization also flopped. In privatization, people are supposed to run the industrial or commercial enterprises instead of government whose role is confined to regulate the economy. In developing countries throughout the world, privatization is used as an instrument for development and bringing significant financial resources to the industry . Over the last thirty years the privatization has been experienced in Japan and Western Europe. In UK, during the late 1970s and early 1980s privatization of several national assets took place during Margaret Thatcher’s administration. Japan too started privatization in mid 80s. Economies of different nations are adopting privatization in order to develop their economic structure. 2. The concept of privatization...
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