LAHORE - Since the creation of Privatization Commission in 1991, around 170 privatization transactions have been finalized in banking, capital markets, energy sector and industry, expert said.
Dispelling the wrong notions related to privatization, majority of the experts have stressed the need for privatization of public sector entities for enhancing their performance and competitiveness to lead the country towards sustainable economic growth. They cleared that privatization was not anti-public rather it was in the larger interest of people.
“Privatization can help reduce the country’s debt burden, besides helping improve allocation of resources and creating job opportunities in the country,” stated former Advisor to Finance Ministry Dr Ashfaq Hassan Khan, who described the privatization an engine for economic growth, which was important for employment generation and poverty reduction.
However, he stressed the need for improving investment climate and good governance adding that merit-based appointments, improved communication and consistence of policy were the main pre-requisite for privatization process. He said that the government’s role should be confined to making policies and providing good governance.
He said that the government is spending billions of rupees of taxpayer’s money on rotten Private Sector Enterprises (PSEs). If these organisations are taken off from the government budget, budget deficit can be reduced, besides slowing debt accumulation.
Executive member of FPCCI and Director IHHA Usman Ghani, however, was of the view that the public sector entities should be privatized with the sole aim of enhancing their performance instead of just focusing on revenue generation.
He said that the past government of the PPP had to pump in Rs1.5 trillion into power sector as subsidy in last five years, and major chunk of which was not properly utilized due to mismanagement and corruption.
Mehmood K. Alam, former SVP of the UBL, said that Pakistan’s experience clearly shows that public sector has not delivered and the real challenge now is to find ways to increase efficiency and productivity of loss-making enterprises.
He asked the government to empower workers and employees by keeping away the political interference in order to improve and strengthen public sector institutions.
The role of the government should be of a facilitator creating conducive environment where private sector could play an effective role,” he said.
He said that there have been several success stories about privatization. He said that government had been providing subsidies to Habib Bank Limited, however, after the privatization, the bank was improved its efficiencies resulting in increase of its borrowers from 6 million people to 12 million besides improving its financial health.
He said that most of the employees of privatized enterprises are usually laid off while some of them chose golden handshake. This huge money was spent as a onetime expenditure or paying off debt instead of further productive use. He further said present environment is not favourable for privatization.
Noted economist Dr. Qais Aslam was of the view that government can revamp the existing structure by appointing extremely competent CEOs in public sector enterprises selected through a completely merit-based procedure. Besides, public private partnership and labour unions in the management of public and private enterprises can help manage the situation to some extent. He said that government should also focus welfare of workers their interests should also be protected in the privatization process.