Tuesday September 06, 2016

 

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Shortages of Necessary Items and Privatization Policy

Under World Bank and IMF pressure, government of Pakistan started privatization policy in early 90s. This policy continued throughout 90s and later until Supreme Court of Pakistan nullified several privatization deals due to grave unscrupulous conditions during last days of Musharraf regime. By the time, Supreme Court of Pakistan acted, the major damage was done to Pakistani economy under privatization policy.

 

Today, when we see various broken systems, shortage of supplies of items of basic necessities of life in the market, we fail to point out why as a nation we are facing this music. Surprisingly no body is making its connection with the privatization policy whereas the fact of the matter is privatization policy is the key reason for all these broken systems and economic failures.

 

Understanding the nature and extent of damages done by privatization policy is little complicated matter and beyond the comprehension of our economic managers, because the extent of our financial stupidity does not even allow us to understand simple things like we borrow money from IMF and World Bank and proudly announce that our foreign exchange reserves have risen to 14 billion from 12 billion.  

 

Is raising liabilities a matter one should be proud of? Sure, if one does not intend to pay this money back, but if one has to pay it through his nose what is it to be proud of?

 

Coming back to the privatization policy and current economic fiascos, our economic managers must understand, in third world countries' unregulated economies where businessmen and manufacturers enjoy unlimited power over market forces, governments must maintain pressure on these manufacturers by staying involved in production process of items of fundamental necessities of life.

 

As  long as government owned electricity, cement, oil, sugar and flour mills, not only the government kept private manufacturers under control through fair competition, the people of Pakistan also had more consistent supplies of items of basic necessities of life in the market and they purchased these commodities at reasonable  prices.

 

Privatization policy damaged government control over manufacturing process. It eliminated a powerful competition of these manufacturers from the market, which on one hand gave these manufacturers a free hand over consumers and on the other, the people of Pakistan constantly faced the crisis of shortage of these items. Whereas for government, these pure economic matters are turning into a law and order issues.

 

Since third world countries do not have perfect government management systems, and Pakistan is no exception, for these governments hundred percent privatization policies is nothing but a serious catastrophic strategy.

 

After several reoccurring shortage crisis of these items of basic necessities, the government must end its privatization policy in electricity, cement, edible oil, sugar and flour manufacturing. Without reversing this policy and without government’s direct investment in these sectors, the people will continue facing these crises of shortages of these items of basic necessities of life and consecutive governments will not only face serious criticism they may crumble due to such shortages.   

 

  

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