PVT

1505 Words7 Pages
The decision to privatize government owned entities brought the subject to the lime light. The debate that has been going on for some time has been reinvigorated again with both the camps, for and against privatization coming up with everything in their arsenal of arguments. As I noted in another article “Privatisation ; salvation or an incomplete truth” the debate whether privatization is good or bad and whether it is required or not has to come to an end soon. Privatization has been the order of the new era. In the last two decades or more global economy has seen more and more of privatization. We have seen that the number of transactions across the globe have risen and the size and value has also increased. It is hard to find a country that has not embarked on a privatization program. Malaysia has sold its National Lottery, Buenos Aires its zoo, Poland has privatized its glass and picture tube factories etc. etc. Margret Thatcher noted in one of her articles citing “the Economist”: Nationalization, once all the rage, is out; privatization is in. And the followers of the new fashion are of the left, the right and all hues in between. The new thought says that ownership is a significant determinant of enterprise performance. In both developed and developing countries, good SOE performance has been very difficult to bring about and even harder to sustain. Those who prefer state ownership advise for the induction of highly paid and obviously motivated managers backed by change in the systems and incentive plans. Very often governments comply and try to improve performance by bringing in new and dynamic managers, and paying them incentive salaries. These measures sometimes have a positive effect. But as the crisis dissipates, so d... ... middle of paper ... .... In Pakistan the biggest hurdle in this enabling environment is red tappism and corruption. Though corruption gets a lot of attention and obviously a volley of statements from the top political leadership but “In-action” goes unpunished. Rather sometimes in-action is rewarded as those who do nothing and neither allow anyone to do anything get away with flying colours when judged for corruption. But this menace of in-action damages the private sector in the same manner as corruption does. If we are sincere in turning around the economy and bringing in efficiency in the SOEs by Privatization we need to take into account the lessons learnt from the past experiences all over the globe. It is said, the road to hell is paved with good intentions. Privatization though intended for good can only achieve right results only if it is done right and for the right purpose.
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