Posts Tagged Theft of Pakistan State Assets Through Cronies Loaded Privatisation Board

Nawaz Sharif has not learned from his past egregious mistakes and anti-state commercial crimes.He has egregiously started the process of privatisation of Pakistan Strategic State Assets. These will be given away at pittance of their actual price to cronies and family members. Nawaz Sharif has multiplied his assets from a few hundred thousand dollars into billions of dollars. Over 60 percent of Pakistanis live below the poverty line. 

Under the Nawaz Sharif government (1990-1993), the proceeds of privatization were to be distributed equally for defense, repayment of foreign loans and social welfare. The Sharif government did not practice this formula but at least that was the declared purpose. Under Musharaf-Shoukat Aziz, this formula was changed: 90% was to go toward the repayment of foreign debts with the other 10% used to operate the Privatization Commission and for social welfare expenditures. 

The Musharaf Shaukat regime earned $2.5 billion during 2006-2007 from privatizations with the target for the following year an additional billion. If the chief justice of Supreme Court of Pakistan had not stopped the privatization of Pakistan Steel Mills Karachi in 2006, the regime would have sold most of the remaining public institutions at bargain prices. This would have been like selling Pakistan. 

Still, the website of Privatization Commission updated in March 2008 announces the planned privatization of Pakistan Railways, Pakistan International Airlines (PIA), State Life Insurance Corporation, Oil and Gas Development Corporation, Sui Northern and Sui Southern Gas Companies, Faisalabad Electric Supply Corporation, Peshawar Electric Supply Corporation, National Fertilizer Corporation, Port Qasim Authority, Civil Aviation Authority, Karachi Port Trust, Printing Corporation of Pakistan, All Utility Stores and Corporation, Rice Export Corporation, Cotton Export Corporation and Convention Center Islamabad. 

We demand that the PPP government stop the process of privatization. An independent commission should be established to investigate the corruption involved in the previous privatizations. The Privatization Commission and the Privatization Ministry should be abolished. Because it gives constitutional protection to the process of privatization, the Protection of Economic Reform Ordinance should be withdrawn

Here are some facts:

According to the Privatization Ordinance of 2000, the purpose of privatization is to alleviate poverty and repayment of foreign debts. But obviously these two purposes have not been accomplished. When privatization began in 1991, the foreign debt was $23.323 billion, today it is $45 billion. Internal debts have also been increasing. According to all government and independent surveys, over 45% of the population lives below the poverty line. The country’s national economic growth during the previous decade (1981-1991) averaged 6.7%; during the first decade of privatization (1991-2001), growth averaged only 4.4%. 

The direct negative impact of privatization has been seen on working class. At least 600.000 workers have lost their jobs during the 15 years of privatization and those still working in the privatized factories are on a contract system. There are no permanent jobs in these factories. Meanwhile the informal sector has grown. But no labor laws govern informal work, consequently superexploitation rules, particularly for women workers. 

According to the 2002 report of Public Inquiry Committee of National Parliament, 80 billion Rupees earned by the Privatization Commission cannot be traced. In addition the privatization process has helped create five large cartels that have looted the masses at an unprecedented level. These are:

• An oil cartel based on 10 oil companies,
• A brokerage cartel based on 4 groups,
• An Automobile cartel based on 3 companies,
• A sugar cartel based on 24 companies,
• A cement cartel based on 10 companies.

The creation and effective functioning of these cartels has resulted in an unprecedented price hikes and profits for the companies. On the other hand, the privatization process has weakened the trade union movement. While registered trade union membership stood at 870,000 in the early ‘80s, by 2007, it declined to 296,250. 

Clearly privatization is a political weapon in the hands of the capitalists. It is not just an economic attack but a political attack as well. It retards the growth of social, political and class-based consciousness. It reduces the country’s social capital and increases private capital. Instead of meeting social needs, it creates and increases private greed. 

The World Bank, Transparency International and other international institution talk of state corruption but never speak about the corruption involved in privatization process. The stories of corruption during the privatization process are in abundance in every country but are ignored for political reasons. 

The Anti-Privatization Alliance will do its best to stop the path of privatization by exposing the corruption and other irregularities in the process and launching a movement against privatization. We are happy to hear the stories of re-nationalization of privatization companies in several Latin American countries. That is the only answer that can be followed by all countries. 

English translation of Anti Privatization Alliance (APA) press conference by members of APA: Farooq Tariq, Khaliq Shah, Azra Shad, Yousaf Baluch, Maqsood Mujahid