Pakistan: ''Privatisation'' : ‘Selling off the family silver’

Daily Times

By Lal Khan

The new assault of privatisation will further aggravate the already excruciating curse of unemployment and price hike The incumbent Pakistan Muslim League-Nawaz regime has announced the biggest ever privatisation of state assets in the history of Pakistan. Sixty-eight State Owned Enterprises (SOEs) are to be sacrificed at the altar of aggressive neo-liberal capitalism. In direct contrast to the perception being peddled by the corporate media, most of these SOEs, like the Oil and Gas Development Corporation Limited, several large banks, oil refineries, are those that have yielded large profits, with future prospects of higher profitability and growth. Hence the notion that privatisation is to end the haemorrhage of the loss-incurring enterprises is a deception and a lie. According to an Asian Development Bank 1998 report, a total of 166 state-owned enterprises have been privatised since 1990 for a cumulative sum of Rs 476.5 billion. Most of this sum has gone to finance budget deficits. Over 78 percent of these enterprises have either shown no improvement or have actually performed worse. This privatisation resulted in accumulation of wealth in a few select families, who have controlled the economy since the establishment of Pakistan. These new owners, rather than investing, ended up stripping these assets, downsizing and carrying out unprecedented attacks on the terms and condition of workers’ employment, mass redundancies and an attack on trade union activity. This privatisation has been carried out at a very heavy social and economic cost. Pakistan’s first privatisation started in the 1950s, which resulted in concentrating wealth in the hands of the ‘notorious’ 22 families. The Sharif government is itself composed of mainly the capitalists who have huge stakes in this privatisation, and will be the main beneficiaries from this plunder of state assets. Banking and finance, oil and gas, energy, fertilisers, engineering, minerals and natural resources, infrastructure entities such as the Civil Aviation Authority, Karachi Port Trust, Port Qasim Authority, Pakistan Railways, National Highway Authority are all up for grabs. Other sectors include Tourism, Telephone Industries of Pakistan, Printing Corporation of Pakistan, National Book Foundation, Pakistan Industrial Development Corporation, Utility Stores Corporation and stores, Export corporations, Shalimar Recording Company, and even the Convention Centre Islamabad; all will be put up for bidding and sold at throwaway prices. The only exceptions are various institutions of state coercion, such as the police, prisons, judiciary, armed forces and commercial and real estate enterprises of the armed forces. This mass selloff is more akin to the privatisation carried out after the collapse of the Soviet Union, where the sellers, bidders and buyers were the same class and cartels. In the process we will see artificial, fake, concocted identities, names and corporations. The question of transparency in a society and state drenched in corruption and malpractices is a utopia, to say the least. With the unprecedented crisis of capitalism, investment dropped by more than 14 percent on a world scale. With the present security situation, energy crisis, hikes in production costs and the rotten state of the infrastructural facilities in today’s Pakistan, no serious investment can be expected. This means that bidding will be low and rigged, and with the party of the mafia bourgeoisie in power. In the 1980s when Margaret Thatcher embarked upon a vicious privatisation policy, it even shocked some of the Tory veterans. Harold Macmillan, the Tory prime minister of Britain from 1957 to 1963, dubbed that privatisation as “selling off the family silver”. Ever since the Second World War, till the mid-1970s, the rapid growth and development in the advanced capitalist counties was mainly due to the massive intervention of the state in the economy. In India, under the so-called Nehruvian ‘socialism’, 74 percent of its economy was nationalised. In the 1960s, the high growth rates in Pakistan were also due to the greater intervention of the state in the economy and the huge infrastructural projects. However, in both the countries, these growth rates failed to raise the living standards of the masses. Under the government of the Pakistan People’s Party (PPP) led by Zulfiqar Ali Bhutto of the first half of the 1970s, the reforms in health, education and other sectors were only possible due to large scale nationalisations. But they could not be sustained in a redundant capitalist system that had failed to carry out the tasks of the national democratic revolution. During the world recession in 1974, even in the advanced capitalist world, Keynesian policies failed to sustain high rates of profits. It was precisely because of this that they embarked on the old trickle-down economics being peddled by Milton Friedman, a new guru revered by the likes of Reagan, Thatcher and General Pinochet of Chile. This policy relegated Britain from an industrial engine of the world to the hub of finance capital and casino capitalism. The biggest economy of the world, the USA, became the largest debtor in the world. In countries like Pakistan, with the uneven and combined patterns of weak capitalist growth, these policies have only brought misery and destitution to the teeming millions. Health and education and other essential services have been deeply penetrated by private capital as the state failed to provide these basic services that are not a privilege but a fundamental right in any civilised society. The masses are being deprived of these essential needs as they cannot afford decent health services and education so expensive in the private sector. And it is these sectors where most of the private investment has flowed due to their indispensability and larger rates of profit. The new assault of privatisation will further aggravate the already excruciating curse of unemployment and price hike. Deprivation in society will only worsen. It is true that corruption and mismanagement were terrible in some of the SOEs, but in a crisis-ridden capitalism under the dictatorship of the financial oligarchy, it was inevitable. A system where the formal economy has contracted to less than one-third of the total economy, corruption and malpractices flourish in black economies, and have become social and ethical norms. The trade unions are weak and fragmented. The leadership of the trade unions has since long capitulated to capitalism. The main party of the masses, the PPP, had embraced capitalism since the early 1980s, and the leadership had abandoned the party’s socialist origins. In 1988, Benazir Bhutto hired the services of N M Rothschild to carry out a feasibility study for privatisation in Pakistan. The previous regime of the Public Private Partnership only gave the masses price hikes and poverty. But the present capitalist regime now wants to go the whole hog and sell off all assets. In their sheer ignorance they think that the class struggle is finished and the masses will never revolt. The tolerance of the masses is in its last phases. How much and for how long can the toiling masses endure this exploitation and coercion? Keynesianism and Monetarism, all models of capitalism, failed to develop society. Nationalisations and half-measures under the rule of capitalism are no solution. Once the class struggle erupts, it will have to fight to the finish. The whole system has to be transformed from the economics of greed and profit to the economic system of the fulfilment of human needs, i.e. a planned socialist economy.