Have Neo Liberal Policies of Privatization been the only Solution of Pakistan Stagnant Economy?
State-owned enterprises (SOEs) in Pakistan play a significant role in the country’s economy. These enterprises are owned and operated by the government, and they operate in various sectors such as energy, telecommunications, transportation, and manufacturing. SOEs in Pakistan have faced challenges related to inefficiency, corruption, lack of accountability, and financial losses. Mismanagement and political interference have often hindered their performance and competitiveness. According to Ministry of Finance reports, the collective Public Sector loss is around Rs 1.4 trillion over the previous fiscal year.
Neoliberal Policies and the Case Study of Pakistan
Neoliberalism refers to a set of economic policies that advocate for free-market capitalism, deregulation, privatization, and reduced government intervention in the economy. Debates in recent times took place to address the economic woes of Pakistan by adopting Neo liberal policies.
However, Privatization is not the best solution considering the business culture and economic atmosphere in Pakistan. The most important rationale behind Privatization is the maximization of efficiency and reduction of losses in the best affordable service price. However, privatization may not fulfil these agendas in Pakistan. Pakistan market structure is non-competitive in nature.
We have only 3 to 4 major airlines with no competition. Similarly, DISCOs having no competition. On the other hand, Pakistan do not have Sharks. Those with decent business investments prefers abroad due to bureaucratic red tapism in the country. Therefore, privatization will be effective in market competitive environment.
Apart from that, Public sector is a service-oriented sector. It does not mean for profitability. The performance of Public sector measured in Consumer Surplus. The numbers of consumers getting benefit from the service is the real progress of Public Sector.
It is also an undeniable fact that Public Sector of Pakistan become White Elephant. Consistent investment in Public sector and macroeconomic refinements can make the public sector profitable. Privatization is not the only solution. However, Public-Private partnerships under some regulations may be the case for Pakistan public sector.
