EDITORIAL: Senate Chairman and former Prime Minister Yousaf Raza Gillani while addressing a conference attended by over 70 presidents of chambers of commerce and industry and diplomats regurgitated the prevailing mantra – ‘the government has no business doing business’.

This is indeed a welcome change of heart for a veteran Pakistan People’s Party (PPP) leader who was convicted in 2011 of hiring 600 people from his constituency that cost the exchequer 30 million rupees annually and spent nearly six years in jail.

While he and his party leaders claimed his incarceration was an act of political victimisation by military ruler Musharraf, yet soon after his release he said he had no regrets in providing employment to those 600 people – a high moral ground that left the country with rising budget deficits that is an inflationary policy, which impacted negatively on all, including the 600 recruited by him.

It is important to note that in the early years after its inception the PPP supported nationalisation over privatisation on the then prevailing logic that the private sector is ruthlessly engaged in profiteering which is to the detriment of the common man, and that a nationalised unit guarantees job security to workers.

This policy led to the financial collapse of many a state-owned entity (SOE) and, in time, the party began to use SOEs as recruitment bureaus for its loyalists. This approach too has changed and in 2019 Bilawal Bhutto-Zardari said he was proud to inaugurate the Thar coal power plant, a public-private partnership (PPP) venture, as his mother had first introduced the concept in her 1993 manifesto.

Data suggests that from 1990 to 2019, the country witnessed 108 PPP financially closed projects, with a total investment of 28.4 billion dollars.

During the Khan administration in 2021 parliament approved amendments to the 2017 public-private partnership law and enacted the Public-Private Partnership Authority, thereby strengthening the legal and regulatory environment with all four provinces enacting their own laws for provincial projects.

The structures used to implement PPP projects are (i) build-operate-transfer; (ii) build own operate transfer; and (iii) design build operate. So far energy and transport sectors have witnessed major PPP activity.

For the government to get out of the business of doing business, as suggested by Gillani, implies a tad more than going the PPP route. It means active withdrawal from all productive economic activity.

Gillani did not define business, which may well range from those units that are producing consumer items, inputs in use by the productive sectors (fertilizers), utilities that are used by industry as well as households, or commercial banks.

He also failed to identify whether by business he was referring to units operated by the federal government, provincial government, and/or an institution of the state. In this context, it is relevant to note that the government has yet to define what it means by strategic assets as the Prime Minister recently stated that privatisation is the way forward except for strategic assets and, additionally, whether the government has the capacity to undertake PPP in ventures run by provinces or institutions.

To conclude, spewing the fashionable mantra of the times may bring allies together, however, without clarity it leaves the general public singularly unimpressed with the possibility of political fallout at the time of elections.

Copyright Business Recorder, 2024

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KU Jun 29, 2024 10:56am
He is right. Economic history of developed countries shows benefits of private sector investment n business, govt only ensures law n fair play, but our raj thrives on economic crimes against state.
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