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sardarzada11 · #23 Friday, June 02, 2006

Progressive Research Institute of Socio-Economics, Pakistan
Since 1988, about 1,00,000 workers have already lost their jobs and about 2,40,000 more workers will loose their jobs after the completion of privatization process in Pakistan in coming years after negotiations with International Monetary Fund (IMF) and the World Bank on structural adjustment program (SAP). In the past, all successive governments wanted to privatize 115 state owned industrial units, banks and public sector institutions for management of its debt.
In her first regime, Ms. Banizer Bhutto wanted to privatize the state-owned Muslim Commercial Bank of Pakistan (MCB) and about 10% shares of Pakistan International Airlines (PIA). However, she failed in the privatization of these institutions as workers resisted over this step by the government.
After the ousted of PPP regime in 1990, Mr. Nawaz shraif took oath as a Prime Minister of the country and promised to continue and fasten the privatization process on the lines of international donor agencies. Unfortunately, after the agreement with the official trade unions, Nawaz regime remained successful in privatizing 69 small state own enterprises and 69 thousand workers were sacked on the bases of flowery Golden Shake Hand scheme. Government earned about eight billion rupees as fruit of that privatization process whereas it was targeting estimated 300 million rupees. In financial sector, Nawaz regime handed over Muslim Commercial Bank s (MCB) management to his party well-wishers against a tiny amount of 80 million rupees and further Allied Bank of Pakistan to banks Workers Management Group. During his own regime and afterwards, several cases of malpractice and plunder were noticed and printed in National dailies. However, Nawaz regime failed to privatize other large-scale units and financial institutions like Habib Bank of Pakistan etc. in his first tenure and were replaced by Banizar Bhutto s second government. Although, second government of Banizar Bhutto sold out shares of Pakistan Telecommunication but she remained unsuccessful to attract the international and local investors despite all its attractive packages in Power, Oil, and Gas sectors.
Second Banizar Bhutto s government was overthrown by her own party man, who was President of the country, on hidden allegations for slow implementation of donors agenda.
Meanwhile, Nawaz Sharif was elected to serve the country as Prime Minister second time with manipulation of state machinery and with underhand commitment to implement donor agencies agenda.
In his second term, Nawaz regime tried to prepare the rest of state own banks for the privatization with the World Bank financial aid of 210 million US dollars. Government hired highly paid professional for the restructuring of the banks. In the first phase of the restructuring, professionals reduced the size of employees and were force 20,000 workers to take Golden Shake Hand and early retirement benefits. Trade unions and trade union activities were banned within banks premises. However, differences with of establishment did not allow him to fulfil his promises and even to complete his tenure.
In these eleven years of so-called democracy, both political and the care-taker governments despite their commitments with donor agencies remained unable to complete the privatization process.
On 12 October, when present Military government took-over the control of the country and announced to carry out the whole privatization plan by privatizing remaining 49 public sectors units for about 4 billion US dollars. The present government looks desperate to find dollars that are due for debt retirement especially as IMF s disbursements look distressingly distant.
The Privatization Commission of Pakistan led by an industrialist Altaf M. Saleem is going to offer 23 projects before December 31, 2000 and others before June 30, 2002, at an average of two units per month in the next 21 month. In first phase of this process, the government wants to sell units in Oil and Gas sectors such as OGDC, PPL, PAK Gas Corporation and National Power Construction while HBL and NBP in financial sector. Further, other well-earning units like PTCL, SLIC, PIC, and Pak Arab Fertilizer will be privatized in the second phase.
Before initiating this privatization process, the present Military government has deployed military personals in all these public sector institutions for restructuring, better management and preparation for privatization. Army s Monitoring Teams are taking all the administrative measures to prepare list for downsizing.
According to different trade unions reports about 25 thousand workers will loose their job in Railways, around 35 thousand in Water and Power Department (WAPDA), about 20 thousand in Tele-Communication Department (PTCL) and about nine thousand in Pakistan Steel Mills. In this way, about 2,40,000 worker will loose their jobs from all public institutions.
However, it looks clear that the government will be unable to raise 4 billion US dollars through this process as inside story is quite different. However, the government talks about greater credibility in its operations and promises. Factually, 132% PTCL shares raised 900 million on sale of 20% in the past but now it will get far lesser now. Likewise, shares of PTCL sold abroad at Rs. 55 each in 1994 are now selling at Karachi Stock Exchange (KSE) at Rs. 26 per share. While considering the continued devaluation in rupee against dollar, this amount declines to Rs. 13 per share. Similarly, shares of Sui Northern have been sold at Rs. 40 in 1994 but after six years are being sold at Rs. 14.96.
Hypothetically speaking, if the government will be able to sell these institutions and gets four billion-dollar, in that case too, this amount would not be sufficient for due payments in December. Further, it is not even sufficient for the amount demanded for the annual debt servicing.
This ranges about 5 to 6 billion US dollars annually for 38.8 billion loans.
Although government has planned to spend 90% of the said amount on debt retiring and 10% on poverty alleviation programs. Therefore, its effects would be disastrous as scores of workers will loose their jobs and people at large will face price-hike, substandard goods and services, which is being indicated by the current situation of the society. For instance, after privatization, prices of edible oil has been raised by about 300%. Similar, this trend is visible in all consumable goods.
Unfortunately, the official trade unions have no plan against the present privatization wave and most of them have accepted it as international phenomena. In these circumstance, Progressive Research Institute of Socio-Economics (PRISE) has accepts this challenge. An attempt is being made to build a chain in varying capacity in different institutions for collective efforts. PRISE arranges seminar, workshop in the said institutions and explains the effects of privatization on workers jobs and on the society.
Now we are able to form committees at work places and within the communities for their common struggle and goal.

Regards,
sardarzada