Privatisation and Reform Programme of Public Sector Enterprises in Pakistan 1960–2004

Abstract

The aim of this paper is to analyse the privatisation process of public sector enterprises in Pakistan during the period from 1960 to 2004.The paper further examines the performance improvement of public sector enterprises and finally develops a reform programme for future sustainability of these PSEs.The major conclusion drawn from this paper were:-During the period of 1952-1960, PIDC established more than 100 industrial enterprises, majority of these enterprises were in East Pakistan set up as joint ventures in Jute Industry.In the period of 1972-1977, the government invested in finance, insurance, transportation, communication and energy.As a result of restructuring of auto sector in the 1980s, sales in PASCO during the nine years period increased from RS2395million, in 1980-81 to RS10830million, in 1988-89.From 1990-1998, 188 public enterprises were identified out of them, 67 enterprises were privatised.Finally, in 2004, Pakistan had completed/approved 139 transactions at gross proceeds of RS134.4billion, of this amount RS33.1billion was received in March 2004.An agenda for performance improvement should include autonomy, organisational structure and efficiency of government enterprise.Similarly, the reform programme for sustainability of public sector enterprises should also include general policy environment, government enterprise relationship and management of industrial enterprises.

Relationship lending: A source of support or a means of exploitation?

“…While government firms in Pakistan do default on their bank loans, there is not a single instance of any write-off relating to government firms in our dataset. Government firms enjoy the implicit backing of the government, and many of them obtain regular budgetary support to meet their operational and financing needs (Syed, Anka, Abidi, & Shaikh, 2012). In general, his advantageous position helps them get loans on preferential terms and conditions, as is evidenced by the negative coefficients of government firm in Tables 5 and 6.…”