Selling the Family Silver

It is true that privatization per se is neither here nor there. The real question is: how are we creating incentives for individuals to contribute to society by (1) starting new enterprises; (2) managing existing ones efficiently.

A century of experience with the issue of private enterprise vs public sector intervention (starting with the reigning in of capitalism in the US back at the start of the 20th century by Roosevelts anti-trust legislation, continuing with the second Roosevelts New Deal, continuing with the failure of the Soviet Experiment as well as the past half-century of global economic development) has by now provided quite good insights on what works and what does not. Above all, you need good governance - constitutional checks and balances. Until these are achieved, economic development in Pakistan will rest on soft foundations.

`` The famous saying of a former prime minister that “the government is not in the business of business,” was the battle cry for the sale of some of the finest state owned enterprises regardless of the fact whether these were making profit or losses. ``

It is easy for a state owned monopoly to make money

`` Privatization in Pakistan is seen as the strategy that will correct all past wrongs of the public sector. But two questions arise: is the wholesale privatization that we have embarked upon good for the country in the long run and whether there is a role for public sector enterprises in the Pakistan of tomorrow. ``

The private sector is not going to cater to the education, health care, drinking water for the poor. Why not have the public sector do these things ?

`` The second main thrust for privatization is the belief that private sector units are more efficient than public sector units. This is not true across the board. Studies from across the world show us that when a comparison is made between public industrial enterprises and private firms producing similar goods, changing the ownership of industry from public to private is neither a necessary nor a sufficient condition for more efficient operation of specific industrial enterprises. ``

Even a private company is subject to the influence of the state with respect to taxes, infrastructure, labor regulations etc.

Simple Advice to all Pakistanis here....DON`T let them (either your politicians or external influences including ADB/World Bank and all)...from what the Iron Bi*ch did in the 80s in the UK to the World Banks efforts in recent years to privatize the drinking water supply in Bolivia (which thankfully failed)...privitization that is UNRESTRAINED especially in pubic good sector including health..general standard education and transport inevitably ends up in completely poor service and that too often priced out of the poorest 20% of society...make that 40% in a nation like Pakistan.

Even if pakistan opts for privatisation, can it go forward. There is no rule of law in pakistan that governs any aspect of the society. here is a news item about privatisation of the most high profile organisation in pakistan. In the first instance, pakistan has to create a law abiding society and the first requirement is that there has to be some notion of value of human life. With the jihadic killings being leagal, with honour killings being leagal, with the vberdict on rape being issued by the president, there is no semblance of law in pakistan.

The basic premise that murder is a tort offence has to change. Murder has to be made a cognisible offence, to be prosecuted by the govt. In pakistan the wali of the murdered has to make a police complaint. For a married woman, wali is the husband. When samia sarwar was murdered by her father, the wali, the husband did not complain and hence no crime was committed.

In pakistan, blasphemy is the only crime that the govt can intervene with out any one making the complaint. This is pathetic. That is why sectarian murders are not investigated by the police. They are settled among the jihadi groups.


PIA shares



MY spouse and I had applied for PIA shares last year and had paid Rs40,000. We were neither allotted the shares nor was the subscribed amount refunded to us until last month when after rigorous follow-ups half of the refund was made.

I have been continuously following up with the Privatization Commission (PC), KASB (lead managers), and UBL (the bank through which I had subscribed for the PIA shares) but there has been no result so far. According to the PC, our subscription applications show subscription of 500 shares each, i.e., Rs20,000 and therefore the PC has refunded only this amount. However, the UBL has received Rs40,000 from us, which they accepted and mentioned in their letters to the PC and provided them all the available support in this regard. But the PC seems to be in no mood to accept this and is denying refund of my money.

I don’t know what exactly they want and what is the solution to this problem. Also, the lead managers are not clear as to what is now required by the PC in this regard.

SOHAIL MITHANI

Karachi

here is yet another pakistani, unaware of the pak reality asking the irrelevant question. What choice is there for pakistan. With 50 percent of the revenue committed to interest payment, another 40 percent for military, what is the option for pakistan. Can the pak govt fund the circular railway in karachi, can it fund rail improvements. There is no money.
The largest industry owner is the military, from cement to carn flakes, will any foreign bank fund any projects, and if so it will become a govy debt.

Can pakistan raise capital domestically, no not at all, with a saving rate of less than 5 percent, compared to 20 of india, there is no money domestically. Total market capitalisation of pak private sector is around 10 billion, how much more can it expand. In the last 4 years, there had been no initial publick offering in pakistan.

So, the great econmist author, ask the correct question, is there an option for pakistan. Do not try to create an image for pakistan, as though it has any choice.

When the military owns Okara farms, when military has fishing rights in the rivers, when military is taking security contracts to protect power lines, well the option is privatisation of military. Well that is underway, the jihadis have done it, the low cost military.

Re: # 1
do you look as stupid as you sound? its funny when indians take a moral highground and give lectures about pakistan, when RSS and VHP fags run around scot free after butchering thousands of innocent civilians on the streets, while the police watched and the CM gave cover. what a great legal system!