THIS is with reference to the article ‘The privatisation agenda’ (Dec 7). Privati-sation is not an unadulterated blessing. Just look at the power sector where the private power producers have played havoc with the economy, and the damage done is almost irretrievable.

There is nothing inherently wrong with public-sector entities both in terms of viability of the businesses undertaken and the need for building public infra- structure. The culprits are the corrupt and incompetent successive rulers and their poor decision-making abilities that must be blamed for the failure of some critically important state-owned enterprises (SOEs).

During Pervez Musharraf’s rule, for instance, Pakistan Steel Mills (PSM) was a profitable organisation. It was flushed with so much cash that the earlier loans were actually repaid prematurely.

After the government changed in 2008, the PSM was plundered by a bunche of cronies of the government of the time. Later, it was shut down in June 2015 on the pretext that it could not pay Rs35 billion owed to the Sui Southern Gas Company (SSGC).

Interestingly, in the eight years since the closure, the government of Pakistan, regardless of who happened to be heading it at any point in time, has dished out over Rs100 billion on account of employees’ salaries and essential expenditure.

The financial haemorrhaging is still continuing even though the plant is not operational anymore. Pakistan is a strange state where looters and plunderers consistently go scot-free.

One was seriously disappointed that the column referred to above chose not to highlight this particular aspect.

In India, public-sector undertakings have had a strong footprint, acting as a critical driver of planned development. Most entities were established from the mid-1950s to the mid-1980s, reflecting the country’s state-led growth policy post-independence that was embedded in India’s first and second Industrial Policy Resolutions (IPRs) in 1948 and 1956.

Under these IPRs, SOEs played a key role in India’s industrial development and in building public infrastructure. At the same time, SOEs enjoyed exclusive rights to operate in many key industries. These public-sector entities covered a variety of fields, like steel, automobile, heavy engineering, oil refinery, electricity, mining, financial services petrochemical, pharma-ceutical, transportation, etc.

It was only after India was able to reach a respectable development stage and became largely self-reliant that the importance of these public-sector entities started declining in the last about a quarter of a century.

India’s rapid economic progress set the stage for the liberalisation of economic policies. It possesses strong and competent regulators for oversight, while regulators in Pakistan are weak, and, at least in some cases, on the payroll of the private sector.

India has reached a point where it can now shed some of its SOEs. We have not. This needs to be remembered rather actively by one and all. Privatisation is not necessarily a solution to Pakistan’s grave economic challenges in the long run. There should be no haste in the matter.

Arif Majeed
Karachi

Published in Dawn, December 21st, 2023