IN an earlier column in this newspaper this writer had made a case for rearranging the politico-economic building blocks of the Pakistani state.
The article had argued for an early closure or privatisation of either management or ownership of not just the commercial entities in the public sector but also those mandated to provide ostensibly social services like education.
The latter plea was driven by concerns about the fiscal burden of these resource guzzlers on already strained government budgets and how they were becoming a potential source of systemic risk for the financial sector. This article will present the case for speedy privatisation, not on some theoretical principles but on the basis of irrefutable evidence to support its adoption as a key element of policy and structural reform.
One particularly bad example of privatisation, the KESC (a subject that requires a separate treatment and discussion), is repeatedly brought up not just by vested groups but also the general public to oppose the divestment of a host of poorly managed, loss-making enterprises.
This perception persists and continues to find supporters despite overwhelming information on outcomes following privatisation or the opening up of economic sectors like telecom, banking, etc that were hitherto closed to private entities. An array of stakeholders has latched on to this outlier example (the KESC), contrary to all available proof of the immense contribution of privatisation towards bolstering Pakistan’s economy.To start with, take the case of the banks. The lessons learnt from the recent experience with the Bank of Punjab and that of banks like MCB, Habib, UBL and Allied (the last three with huge holes at the time of their privatisation) until their privatisation began in the early 1990s should be a sobering reminder on the need to protect the interests of depositors and to maintain the soundness and stability of the banking system
