Privatisation: transparency is the name of the game

In yesterday’s interview with BR Research, Mohammad Zubair, the recently appointed chairman of Privatisation Commission, made an important point. He said transparency of the privatisation process is of utmost importance and that the commission is in the process of sharing and discussing the privatisation process with the stakeholders so that fingers are not raised after the transactions are completed.

Zubair said that he has already informed the Senate’s committee on finance about the privatisation process and that he is also going to be meeting the leadership of other political parties as well as share the process with the media, so improvements, if any, can be brought about.

While we wait for the commission to share the details of the privatisation process to initiate stakeholder deliberation, we hope due time will be given to the stakeholders to review and comment on the process. Due timeframe for review and comment is important, because, as Zubair said, “it is not just that the process has to be transparent but it also has to be seen and accepted as transparent”.

To this end, media, especially electronic media, would do well to discuss the process and develop an understanding for the public at large. Privatisation of SOEs can be a “game changer” for Pakistan’s economic landscape, and transparency of privatisation, or lack thereof, can be the single biggest deciding factor whether privatisation will be successful or not.

Therefore, the more the Commission puts up the privatisation agenda for stakeholder as well as public deliberation, the better the outcome - even if it comes at the cost of a nominal delay in the process.

Bear in mind that given Pakistan’s security situation, foreign investors may not necessarily bid aggressively for the SOEs. Some may not bid at all. This means that local business groups or consortiums might eventually be getting a stake in these SOEs. And some of these leading business groups may eventually have some connection with the ruling elite.

At the same time, however, having a connection with ruling elite should not preclude local business groups for bidding for an SOE. As long as the privatisation process is transparent and that SOEs are not intentionally sold off to buddies, the bidding should be open to all, regardless of whether they have political connections or not.

In this context, the whole issue of transparency becomes even more important – just so to ensure that even if local business group ends up buying an SOE, fingers are not pointed towards the government and the process is not derailed.