Privatization… Pakistan's means to economic self-sufficiency

By Sardar Burhan

ISLAMABAD, May 4 (KUNA) — Economic self-sufficiency is the main source of any nation’s survivability in modern era of globalized economic system that has inherent challenges and opportunities. To meet such challenges, the governments often take notorious initiatives to ensure transparency and quality of services along with increased productivity; since real time measures only guarantee economic operation in the developing era.
Similarly, for the sake of sustenance of national economy, the Government of Pakistan has eagerly pursued the policies of privatizing major loss-making institutions that now range around 69. The cost of major loss-making institutions of Pakistan is estimated around USD five billion a year. In Pakistan, unluckily the case of nationalized institutions has so far proved to be less of a success story, mainly due to union monopolies and political interferences.
Once high-income institutions such as Pakistan Steel Mills, Pakistan Railways, and Pakistan International Airlines (PIA) are some of the key examples that despite having immense earning capabilities have merely proved to be a declining burden over national economy. The privatization process of PIA is about to enter into the concluding stage as the Qatar Airways Company (Q.C.S.C) is keenly interested to buy the shares of the national flag carrier. The Company with its aviation track record and immense professional expertise could easily bring the ailing airline into a new life, which in turn will automatically benefit the employees with better pays and opportunities with an international exposure.
Minister of State and Chairman of Privatization Commission, Muhammad Zubair Umar told KUNA that the Government of Pakistan is aiming to complete the privatization process of PIA by December this year. The government has risen around USD 1.8 billion through six transactions that have been completed in last two years. He further said, “We are undergoing a very critical phase in the privatization process where we have changed our strategy of bid, especially when it comes to distribution companies,” adding that the government is taking all measures to improve efficiency of these institutions through restructuring in order to avoid the privatization.
Some of the efforts as a result of the due diligence of the different companies have already resulted in savings of around USD 65 million as “we have cut the line losses to 18 percent from 19 percent and have improved the collection from 88 percent to 93 percent on average.” Answering a question about employees job security during the privatization process, the Minister said, “The employee benefits is the main focal point of our entire program of privatization and we will have a voluntary separation program for them, who want to quit the institution after reform or privatization. The government will ensure that the new strategic partners would take care of the employees,” he noted.
Evolution and change are choices made not for personal sake but for the overall improvement of the organization, betterment of its employees, growth and better adaptation to a changing world. Companies from the Gulf have always jumped in to provide financial support to the loss-making Pakistani institutions. Their initiative always helped these institutions, which in turn started making huge profits and also changed the financial conditions of the employees.
Pakistan’s Government sold 26-percent management shares of once the loss-making Pakistan Tele Communication (PTCL) to UAE-based telecommunications services’ provider Etisalat in 2006. After the privatization of PTCL, the general condition of employees also improved through better wages and professional capability. The privatization of PTCL also invited a huge competition in the telecom industry with innovative ideas, technologies and services. For instance, one of the most successful cellular companies in Pakistan, like Abu Dhabi-based Warid Telecom, twisted remarkable service excellence in Pakistan. With a very short span of time, the company earned an extraordinary popularity in the telecom industry with exceptional quality and reliability. Today, the company is recognized as one of Pakistan’s most trusted cellular service provider, having one of the largest and fastest 4G LTE network in the country.
The essential economic reason for the privatization of defunct national institutions is of the government’s serious obligations to ensure that national enterprises run well since their previous situation never let key national enterprises flourish. The yearly losses of aforementioned institutions are some of the basic reasons that never let the nation prosper. However, to improve the quality of services and the sustenance of the national economies, the only notorious measures left with the developing nations are to opt for the structural economic-changes through the process of privatization. The previous process of the privatization has successfully added USD 1.715 billion in the national finances. In February 2016, the Government of Pakistan sold its stakes in the Habib Bank Ltd and successfully rose more than USD one billion. With the other gains of the privatization, the employees also got immense benefits through the process, including better pays and services, professional capability that ensures and attracts the professional talent through merit and competency.
The improved quality of production means and the services will ultimately increase the demand of quality national exports to the international markets. Previously, the national economy hardly touched the exports at USD 22.038 billion in the fiscal year 2014-15, which was also mainly due to the less productivity and lacking quality of national industrial production, but with the current pace; Pakistan would prospectively become successful to generate an annual USD-35-billion as an export target with the momentous benchmarks of privatization. (end) sbk.hb

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