Announcing the ECC decision to sack over 9300 workers of the Steel Mills as part of the government plan to revamp the entity, the Federal Industries Minister Hammad Azhar said that with a view to revive the industrial unit, it was imperative to move away from an owner and operator mode to that of owner and policymaker and include the private sector in these efforts. Referring to the stance taken by the opposition parties, he said, “It is unfortunate that those opposing our plan are only playing politics, even though it was during their tenure that the Pakistan Steel Mills (PSM) became a loss-making unit and was shut down.”

While it is hard to challenge the rationale to get rid of the state-owned enterprises running into perennial losses putting heavy burden on the state exchequer, it is pertinent to mention that when the PML-N government, after closing the PSM decided to privatise it, PTI along with PPP opposed the move tooth and nail, playing politics which the minister has accused the opposition of doing now. For putting the record straight for the readers, it is pertinent to mention that Imran Khan, while on his election campaign in Karachi on March 4, 2018 unequivocally announced that he would not allow the PML-N to go ahead with its plan to privatise PIA and Steel Mills. The PTI core committee, in its meeting on March 15, 2018 chaired by Imran Khan tasked Dr Alvi to contact unions of PIA and Steel Mills and organise protest rallies against the move. After assuming office as Prime Minister Imran khan is on record to have expressed the resolve to turn the PSM into a profitable entity. The decision to sack the employees also goes against PTI manifesto of creating 10 million jobs.

The PTI decision now to privatise PSM is actually the endorsement of the PML-N’s policy to privatise the Steel Mills. It surely opposed it then to gain political advantage without caring about the public good. Unfortunately, that is the reality of our crass politics.

There are no two opinions about the fact that the nationalization policy of the first PPP regime proved an economic disaster for the country, as the decision was taken on purely political considerations rather than taking into account the economic realities and its likely impact on the future health of the economy. The result is that over the years the state-owned enterprises have become a burden on the economy instead of contributing to its health and progress. It is estimated that State Owned Enterprises (SOEs) are collectively incurring an annual loss in the vicinity of Rs.400-500 billion; nearly 15% of the total revenue receipts of the government in a fiscal year. Keeping them afloat, therefore, constitutes a huge drain on precious national resources which could have been invested in vitally needed projects of socio-economic development. The government had to spend Rs55 billion alone during the last five and half years on the salaries of workers of PSM while it was dysfunctional besides incurring an expenditure of Rs90 billion on bailout packages and other steps to make it viable.

Honestly speaking, no developing country like Pakistan, faced with a perennial scarcity of resources could afford the luxury of feeding these white elephants indefinitely. Therefore, their privatisation and revamping with the participation of the private sector is an economic necessity as well as the best option available to the government.

It is not the job of the governments to run commercial concerns except those of strategic importance and public-welfare oriented ones. The government only has a regulatory role to ensure that there prevails healthy competition in the market. Many other countries including Britain have taken such decisions to rectify the economic maladies and improve the health of the economy. The decision to privatise non-profitable state-owned enterprises is economically prudent and would contribute tremendously to the process of revival of the economy.

The issue of privatisation of PSM has lingered on for a long time and over the years has also become a serious political issue. It was probably due to the likely political repercussion that the SC during the Musharraf regime stopped the government from going ahead with its plan to privatise PSM.

The decision to privatise or revamp the non-profitable state-owned enterprises, particularly PSM is economically prudent and would contribute tremendously to the process of revival of the economy. However, there is a need for evolving national consensus on the issue. The government is better advised to shun its obsession with solo flights and also take the opposition parties on board while taking decisions of crucial national importance. The workers of the Steel Mills are already on the streets protesting against the decision and the Sindh government has also vowed to resist the initiative.

Former Chairman Senate Raza Rabbani has raised some very pertinent objections to the decision of the government, claiming that after the 18th Amendment, the ECC and cabinet were not proper constitutional forums for taking such decisions and they could only be taken by the Council of Common Interests. The point raised by him deserves appropriate consideration and a proper debate in the parliament. The government therefore must make sure that the concerns expressed by opposition are properly addressed; utmost transparency is observed and seen in the entire process and the decision is taken at the appropriate constitutional forum to avoid any political and social backlash.

In the meantime, the issue has been taken by the SC and it is hoped that the apex court while taking a decision would keep in view all the legal and political dimensions of the case so that the issue is amicably resolved.


Malik Muhammad Ashraf

The writer is a freelance