ISLAMABAD - The government could control its soaring budget deficit if it stops spending on Public Sector Enterprises (PSEs) that eat Rs 300 billion from the taxpayers money every year, which is about 1.5 per cent of the GDP, said Dr Ashfaq Hassan Khan, an eminent economist and Dean National University of Science and Technology (NUST).
He said this while addressing a seminar on ‘Privatization: New Imperatives’ and also launched a book titled, “The Impact of Privatisation in Pakistan” by Dr Akhtar Hasan Khan.
He said today government is spending over Rs 300 billion of tax payer’s money on rotten Public Sector Enterprises (PSEs) which is about 1.5 percent of GDP. If these organisations are off from the government budget, two things can be happened; budget deficit can be reduced and as such the pace of debt accumulation can be slowed and the amount of money can be spent on poor masses by improving education and health infrastructure etc., he maintained.
Speaking on the occasion, Vice Chancellor, Pakistan Institute of Development Economics (PIDE) Dr Rashid Amjad said policy stances reflect our best economic interests and take into account the political economic dimensions. Pakistan’s experience clearly shows that public sector has not delivered and the real challenge now is to find ways of increasing efficiency and productivity of loss making enterprises.
“We should empower workers and employees and keep away political interference in running and planning of these institutions,” he said.
Dr Ather Maqsood, Head of Department, School of Business, NUST, said that there are two reasons behind why the privatisation has not been successful as was originally perceived are economic reasons and socio-psychological and political reasons. He said that most of the employers of privatised enterprises have laid off employees by introducing schemes like golden hand shake. He further said present environment is not favourable for privatization.
Dr Akhtar Hasan Khan gave a historic background on privatisation in Pakistan that started in 1960s. He said that the present internal as well external situation is not favourable to launch any privatisation programme.
However the government can seek revamp of existing structure by the appointment of extremely competent CEOs in public enterprise selected through a completely merit based procedure, public private partnership and giving weight to labour unions in the management of public and private enterprises and by overcoming energy shortage as soon as possible.
He said, “Pakistan is poised of rapid industrial and economic growth and it requires change of policies.”