Political uncertainty puts many economic schemes on hold
By Sabihuddin Ghausi
KARACHI, Sept 2: A lull seems to have set in the functioning of the government at all levels in last ten weeks or so following in quick succession a few landmark events in Pakistan’s history.
These are: Supreme Court judgment on Pakistan Steel, Opposition’s vote of no confidence against the prime minister in the National Assembly, and recently Nawab Akbar Bugti’s death and his controversial burial.
In Sindh, the distance between the chief minister and his cabinet colleagues, belonging to his own party as well as of those of Muttahida Qaumi Movement (MQM, has again increased to a stretch that there is virtually no communication and ministers and advisers complain of many files, summaries and issues again piled up on the chief executive’s desk.
Major decisions awaiting approval of the government include setting up of a micro finance bank with public private partnership, appointment of a fund manager for pension fund, several investment proposals and setting in place a system to allot land on less than market price to legitimate investors, government teachers’ issues, and opening of provincial jobs.
“The chief minister has no time to discuss issues of his province,” a minister complained, who with his few other colleagues want to discuss the employment, industrialisation and other issues. The MQM ministers look visibly in a state of shock on Bugti’s death and the way he was buried.
“Balochistan was the only province after Sindh where some of our MQM colleagues enjoyed the best of hospitality during the eventful decade of nineties,” a MQM leader in Sindh government confided.
At the federal level too, the policy draft on Small and Medium Enterprises (SMEs) is almost finalised and is waiting for a final vetting by the prime minister secretariat for last few weeks.
The “Rozgar” scheme was announced in the federal budget for 2006-07 and is now to be launched on Tuesday but not with much fanfare that could match what Benazir Bhutto did for announcing her Employment Programme in 1989 and then Self-Employment scheme in 1994 and Nawaz Sharif’s Yellow Cab scheme in 1992.
Unemployment has always been a chronic issue in Pakistan on which all military governments have remained indifferent and totally unconcerned but political governments—-even those of late Mohammad Khan Junejo in 1986 and Shaukat Aziz in 2006—-try to offer some lucrative programmes to get some support.
Government sources and banking circles attribute the delay in launching of the Rozgar scheme to “political factors” without elaborating whether it is an in-house division of the mega size federal cabinet on this issue or the emerging question mark on Pakistan’s political horizon. Whatever the reasons are, the ministers in Sindh cabinet belonging to MQM or PML (Q) are as much in wilderness as an educated young man, who is desperately looking for a job and is eagerly waiting for the details of scheme
But the government programme that is most hardly hit by the lull is privatization, which has come to a virtual halt.
After a nine-member bench of the Supreme Court scrapped the privatisation deal of Pakistan Steel on June 23, the government showed a brave face of going ahead with its public sector divesture agenda with same religious fervor and commitment.
On August 3, 2006 its website showed the list of more than two dozen entities to be privatised before the end of 2007. This list of upcoming privatisation has now been removed from the website and has been replaced by another list that shows names of same entities but without any indication of dates.
Pakistan Steel was on top of the previous list with a note that its 51 to 75 per cent shares will be offered with management control. The date was to be announced “after resolution of technical problems.” No word is coming from the government on future plans for Pakistan Steel.
Media reported on Saturday that a few directors on the board of Pakistan Steel have decided to quit on charges of “too much government interference” and sources in Pakistan Steel say that the contract term of the PSM Chairman General (retd) Abdul Qayuum has expired.
“The chairman is on notice to hold office till appointment of a new head,” a well placed source in Pakistan Steel disclosed, who said that the contract term of the present chairman has expired more than eight weeks ago but the government is not able to find a successor.
“This uncertainty is affecting the working of Pakistan Steel,” the source said.
As many as ten privatisation deals were to be taken up in the year 2006 that include offering 90 per cent shares with management control of Heavy Mechanical Complex and Heavy Electrical Complex.
The sale of management rights of National Investment Trust (NIT) in the current third quarter (July to September) of 2006 is probably the most significant and important privatisation that would have far-reaching impact on Pakistan’s corporate world.
There is no word if any progress is being made on NIT divesture as the month of September begins. Another significant feature of privatisation programme is offering of Oil and Gas Development Company (OGDC’s) GDR to foreign investors.
Substantial headway has been made and road shows organised abroad are being addressed by top leadership of the government. The stock brokers and corporate leaders remain unsure whether these GDRs of OGDC would be offered in the stipulated time frame.
As it appears that divesture of shares and offering of management control of Pakistan State Oils, Pakistan Petroleum, Sui Southern Gas, Sui Northern Gas, Faisalabad Electric Supply Company, Peshawar Electricity Supply Company will be put on hold till next elections expected either in 2007 or 2008.
The Opposition political parties have made a big issue of privatisation of Pakistan Steel after the judgment of Supreme Court but are apprehensive of transactions of Habib Bank Ltd. Pakistan Telecommunications, Karachi Electric Supply Corporation and many other deals.
“All these controversial deals are bound to dominate the electioneering next year or in 2008,” a local PPP leader declared.
