Political Economy of Pakistan (POL341)
Privatization Program in Pakistan: Lack of Proper Implementation 1. Introduction
During last six decades, Pakistan has employed several different popular policy trends to get better economic position. Under influence of prevailing Statism in 1950s Pakistan developed industrial base and disinvested some of state enterprises. Bhutto perceived nationalization policy at the time of dominance of Statist school of thought. Statist school of thought considers it a duty of state to play active role in economy of country directly or indirectly (Kamrava). In 1980s, developing countries started getting more liberal economic policies after getting indebted due to OPEC crisis and stagflation in late 1970s. In early 1980s, International Monetary Fund (IMF) and World Bank started advising adjustment in economic policies of indebted countries which included almost all least developed countries (LDCs). In 1988,Structural Adjustment Program (SAP) brought a complete package of adjustments in economic policies of Pakistan to get hold of worsening economic position. Speedy privatization was one of the adopted policy measure under this program as liberalization and deregulation were at the core of SAP. After formation of Privatization Commission of Pakistan (PC) in 1990, Pakistan was on the road to privatize public enterprises. Privatization program was adopted to overcome fiscal deficits, to deal with inefficient public sector and to promote Laissez-Fair economy (Roepstorff and Ansari, p.8). Along with these motives, Privatization was adopted in order to retire national debts (Pakistan, Ministry of Finance, 1991) and to attract foreign direct investments (FDI). These were some of the main justifications posed by Pakistan for the reason behind privatization process. But behind the scenes policy makers throughout the world started realizing inefficiency of state owned enterprises. Some scholars pointed out biases behind these rationales negating the presented arguments. Privatization became matter of controversy and dissatisfaction for stakeholders and in the scenario of Pakistan all taxpayers and policymakers are stakeholders. There was a hot debate which started from early 1980s regarding the choice of policy measure to deal with poor public enterprises. Privatization process proceeded in following years in a way which made it more controversial. These controversies became a hurdle for Pakistan in privatization process making it difficult for privatization commission of Pakistan to achieve best interest of Pakistan out of this policy. In order to understand why we couldnot get better off even by selling out 167 public units for Rs.476.421 billion since 1991(Pakistan, Privatization Commission), we need to understand relevance of this program’s inception relative to international political economy and its far reaching consequences on political economy of Pakistan. When one assesses course of privatization procedure followed by Pakistan after 1990, one would be of the opinion that privatization is bad and controversial for Pakistan. Some well-known social scientists like Akbar Zaidi also have this opinion. It is important to consider both sides of privatization policy. One should understand that the privatization policy did possess some potential benefits for economy which were not achieved by following bad policy measures. The privatization commission can reconsider its implementation procedure by restructuring privatization framework to get best socioeconomic interest of Pakistan. Privatization policy itself was potentially beneficial but the lack of proper implementation of privatization policy by Pakistan is the reason for controversies related to it. This paper is about the close analysis of privatization policy followed by Pakistan since 1991. The paper will be focusing on its...