ISLAMABAD: Senior economists, lawmakers and academicians on Thursday questioned the government’s plan to privatise profitable public entities.
They also raised eyebrows over the partisan nature of the Privatisation Commission that they feared would lead to future monopolies.
The experts were speaking at a roundtable on ‘Privatising public enterprises’ organised by Jinnah Institute as part of its ‘open democracy initiative’ aimed at bridging the gap between the citizens and the state and formulating policy directions based on research.
Former finance minister Senator Saleem Mandviwala supported the privatisation of those public sector enterprises that had been making losses. But he regretted that despite debate on the privatisation of state-owned enterprises in both houses of the parliament, the finance and planning commission ministers had not attended any session to address the questions raised by the opposition.
“Is the government not making a blunder by outsourcing profitable and established public entities like OGDCL, PPL, PSO and Sui gas companies? If the government has a reason and logic to defend its plan, the questions of parliamentarians should be addressed,” Mr Mandiwala said.
Former secretary Privatisation Commission Dr Akhtar Hasan Khan said the average growth rate during the ‘90s and 2000s was four per cent, showing outsourcing did not lead to economic growth.
He ridiculed the government’s decision to include the Civil Aviation Authority (CAA), Karachi Port Trust and the National Highway Authority (NHA) in the privatisation list, arguing these all were regulatory bodies or critical public service providers.
Prominent economist Dr Akbar Zaidi called for rethinking the whole process of privatisation, adding the fiscal deficit argument in favour of privatisation did not hold ground because majority of public sector enterprises in the list of privatisation were profitable.
Mr Zaidi said instead of selling profitable enterprises the government should focus on implementing tax reforms to resolve the fiscal deficit crisis. He questioned the idea that loss-making public sector organisations needed to be sold to make them profitable.
“Companies which buy loss-making PSEs would only do so to strip their assets and make a profit,” Mr Zaidi said and noted that more than a dozen privatised units were now closed.
Similar scepticism was also expressed by Professor Asad Zaman, the vice chancellor of Pakistan Institute of Development Economics (PIDE), noting there was no empirical evidence to support the argument that private sector was better able to manage organisations.
The participants expressed concerns on how state-owned enterprises were being run, with many of them referring to anecdotes of incompetent management and inefficient services.
Others also cited the examples of OGDCL, PPL and other profitable organisations that had been earning billions of dollars.
Dr Ashfaq Hassan Khan, the dean of Nust Business School, said the government was not responsible for giving out jobs and should not be in the business of doing business. He agreed with the observation that the list of institutions earmarked for privatisation demonstrated a lack of understanding by the government.He also criticised the partisan nature of the board of the Privatisation Commission and called for strengthening regulatory bodies before privatisation to avoid future monopolies.
There was also considerable debate over what expectations were associated with the privatisation process.
Political activist Dr Aasim Sajjad Akhtar argued that the privatisation debate should be enhanced to discuss the larger concern of what the role of the state was.