Private or public?

It seems that the focus on the issue of the privatisation of PIA has shifted more towards an academic debate over the merits vs demerits of privatisation. Looking at the peculiar situation of Pakistan, PIA enjoys almost a monopoly position on domestic routes. When the market is not competitive, creating a private monopoly may harm consumer interests. Therefore, in this case, privatisation might create a private monopoly which could seek to set high prices. It is better to have a public monopoly rather than a private monopoly which can exploit the consumer.

On the other hand, experience has revealed that in government-run industries, the government may be reluctant to get rid of the ‘deadwood’ and surplus staff because of the negative publicity involved in job losses. A private firm is interested in making profits and so it is more likely to cut costs and be efficient. What is needed is to revisit the strategy and method of privatisation.

 Dr Najeeb A Khan

 Islamabad