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EDITORIAL: Now that the judiciary has begun questioning the place of state institutions in the lucrative real estate business, perhaps something will finally be done about this blatant conflict of interest and the harm it does to the entire sector. How is it possible for a deputy commissioner to take action against a housing society run by the ministry of interior, IHC (Islamabad High Court) Chief Justice Athar Minallah asked very rightly, when he heads a cooperative housing society himself as well?

Things are infinitely more complicated on the ground because, as the able CJ noted, every state institution is involved in this business and therefore is able to influence forces that are ordinarily best left to the marketplace to control. Naturally, then, well-placed government officials would want to frame policies that protect their own plans and investments the most; which would of course be at the cost of others not so well positioned or connected. Little surprise, therefore, that the most powerful state institutions run the most profitable and expansive real estate businesses as well.

Such activity does cause problems for the parts of the sector that are not directly under government control. Not only do they complicate the business of regulating real estate, but in the matter of disputes, especially if they should involve one or more companies run by official departments, they also make impartial arbitration almost impossible. All this affects common people looking to make investments in the sector the most because they are exposed to the push and pull of government forces as well in addition to all market factors. For a government that made provision of households to the bottom of the food chain an essential part of its manifesto, such issues should matter more than most other things.

What CJ Minallah said about land grabbers, and how they prey upon ordinary citizens, is also very important. Pointing out that it’s not possible to get away with such things without the aid of SHOs (station house officers) and patwaris, and also stressing that state departments protected land grabbers while people had been deprived of prices of their land for more than 60 years, he also demanded to know within four weeks how such severe conflicts of interests could be addressed. Now the attorney general is expected to come back with the interior secretary’s and the prime minister’s positions on the matter in the last week of January.

It is precisely because of such tendencies, and a lot more, that the state is said to have no business in business. Governments should restrict themselves to statecraft and let the private sector take care of things like making houses and keeping demand and supply in line. It’s very large footprint in real estate also resonates across a very wide spectrum because of its close connection with 30-40 other sectors, which disempowers competitors, distorts prices, and encourages corruption on a very wide scale. This practice can and should be stopped immediately; regardless of all the trouble that is sure to be created by stakeholders.

Making housing societies for government employees is one thing, and a very fair provision at that, but making government departments direct players in a very large sector is a completely different matter. And even if the court decides to put the brakes on it right now, as it should, it will still take a very long time to calculate just how big a mess has been created in the many decades that this charade has been going on. Yet for the government to drive the sort of change that restricts its own influence in such vibrant sectors is going to be very difficult, to say the least, therefore the courts would have to be directly involved.

Copyright Business Recorder, 2021

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