Ambitious privatisation plan to lessen govt control
By Sabihuddin Ghausi
KARACHI, Aug 16: The Privatisation Commission looks all set to complete the deals of more than two dozen public sector entities by the middle of 2007 before next elections and also take up an ambitious privatisation of 63 government organisations aimed at bringing virtually all segments of the economy -— finance and capital, oil and gas drilling and distribution, refineries, coal, electricity generation and distribution, railways and all allied facilities, port operations at the Karachi Port and Port Qasim, civil aviation, shipping and air services -- under private control.
“How will Pakistan’s political, social and economic landscape look like by the end of 2007, if the government succeeds to complete its privatisation programme?” is one question that is being discussed and debated in academic and political circles in the context of expected general elections at the end of 2007 or early 2008. The Privatisation of National Investment Trust (NIT), Pakistan Petroleum, two gas distribution companies, four electric power generation and distribution companies with a big oil distribution company by mid-2007 should bring a qualitative change in Pakistan’s power structure. It will further diminish state control, enhance corporate influence, specially the privatisation of NIT will give immense power to the successful bidders who will have direct access to the board rooms of more than 200 companies and make millions of consumers vulnerable and more helpless after management control and ownership of two gas distribution companies and four power companies are passed on to the private operators.
“Consumers are vulnerable because of lack of any effective regulator and that the government has neither vision nor capacity to safeguard interests of the people against big business,” is one point of view against which the counter argument is that the privatisation of utilities brings itself with it the regulator and that people are themselves the defenders of their interests.
“Substitution of state capital with private (both domestic and foreign) in the national economy impacts tremendously on political and social structure of the country,” argued an intellectual, who is closely linked with the present coalition setup but wants to conceal his identity because he does not share many objectives of the government leaders.
“A change is already visible,” he explained and pointed out towards the government agenda for next elections which is “electricity, water and gas for everyone”. He compared it with late Bhutto’s slogan of “Roti, Kapra aur Makan” (bread, clothing and shelter) given in 1970. “In all these more than 36 years -— from 1970 to 2007 -- we have gone ahead from basic necessities to a demand for electricity and gas,” he said and indicated that in the next elections the government might promise cars, washing machines and other domestic appliances for household.
“Bhutto and his PPP sought power through votes of the people and promised basic necessities for all in their election manifesto,” argued Zia Banday, an analyst at a private brokerage house. He said the present rulers were confident that their “election techniques” would bring them back to power again and their constituency is big business. The government’s promise of electricity, gas and water for every household is to please domestic and foreign investors.
Mr Zia doubts if the government will be able to successfully complete its privatisation programme because in the past “dates have been announced and then extended indefinitely”. He explained there were a lot of intricacies and complications in the privatisation deals that were mostly overlooked by the Privatisation Commission, which explained the deviations and changes after bidding.
Akbar Zaidi, a noted economist, believes that the present trend of economic policies was “not reversible”, as none of the political party had the
capacity and will to oppose privatisation. He agrees that privatisation has hurt consumers’ interest, rendered trade unions powerless and ineffective and made big business the ultimate decision-maker in the national affairs with military.
Mr Zaidi does not see any positive results -— in economic, political and social terms -- emerging from the next elections for the people.
Asad Saeed, another noted economist, blames trade unions for having been rendered worthless, as leaders of many public sector trade unions sought privileges for themselves rather than for workers and organisations they worked for.
But he doubts that big business can influence politics of rural areas, as feudal continues to dominate. There may be a conflict of interest in the urban and rural elite but they keep their ties intact to gain their hold. “People at large may get some leftover crumbs from the infighting of ruling partners,” Mr Asad believes.
Dr Kaiser Bengali, an economist who was targeted by the government and removed from the key office of Social Policy and Development Centre, a private consultancy for projecting a different picture, sees anarchy and disorder from the privatisation programme. “It is being done to plug the trade deficit that is now almost equal to Pakistan’s foreign exchange reserves. But privatisation is bringing a negative impact on Pakistan’s economy, as it is causing an outflow of foreign exchange. This repatriation of profits of privatized units will increase considerably in the coming years.”
Taj Haider, a former Senator of the PPP, is confident of his party putting up a tough defiance to the new crop of monopolists and oligarchies, but admits of a clear division in ranks and file. “Yes, there are powerful corporate protagonists in the party,” he said and gave a few names with a request not to print. His party, he declared, still believed in state’s role in promoting growth in real sectors -- agriculture and industry -— generating employment and improving earnings of the people in rural and urban areas even if it caused inflation. “Growth, employment and improvement in incomes tackle inflation effectively,” he argued and added that the privatisation had not contributed to Pakistan’s industrial or agricultural growth.
All said and done there is almost a consensus that irrespective of the results of elections forces of status quo will stay in commanding position after the elections. There, however, is some “fear of unknown” lurking over the minds of thinking people.
