Privatization plans

Once again, talk about privatization is doing the rounds. For the past at least 30 years we have been privatizing state-owned entities in the name of economic restructuring and better management. The neoliberal agenda of international financial institutions (IFI) is never at rest about striking at the root of public properties in developing countries. The mantra holds a usual refrain of public enterprises being inefficient and the need to generate funds to retire debts. But no amount of privatization has been or will be enough to retire all the debts that we have accumulated under the able guidance of the same IFIs which sell structural reforms on one side, and trap countries in monetary muddles on the other. The latest recommendations to the federal cabinet are concerning the privatization of as many as 46 entities.

According to media reports, four departments are to be abolished and four others to be shifted to provinces. IFIs and liberal scholars never tire of promoting privatization as a panacea to the economic troubles of countries such as Pakistan. And debt-ridden countries find themselves in a bind to follow the advice. One wonders after 30 years of privatization how Pakistan has become more efficient or has shown higher productivity. Agreed that some privatized banks offer better customer service in comparison with erstwhile government-owned banks, but this cannot be generalized with other entities.

There has not been sufficient research to guide us about the welfare impact on the people of such privatization processes. Seemingly, the impact is negative as we see higher inequalities in income distribution and increasing poverty. Similarly, nearly all privatization has resulted in increased job losses for people and reduced social welfare. These negative ramifications of privatization must be kept in mind while embarking on a new privatization spree. Economically the government may get some temporary relief with the funds earned through such measures but on the social and welfare fronts this does not result in relief to the common people. The government must consider the possibility of further unemployment as a result of a constricted job market after privatization. Increasing income inequalities will not be good for society and will add to the problems people are already facing.