PRIVATIZATION is a failed strategy in the West which Interim privatization minister failed to defend in Pakistan. Political parties should contest general elections on party manifestoes including jobs and privatization instead of blaming others for fallout of their corrupt policies. UK, US, and EU are facing strategic fallouts of 80s privatization policies despite having strong democratic checks and balances, far less corruption and strong foreign policy. They have ended up spending more money on mega subsidies, poverty, sheltering homeless, loss of revenue, astronomical debts, corruption and failing democracies. Pakistan needs to stop privatization and start creating jobs to protect its democracy, economy, and foreign policy.
To avoid UK’s Steel industry fallout, Pakistan needs more steel mills in public sector not privatization. It can easily get international funding for such strategic projects vital for economy, industry, infrastructure, and creation of jobs. UK government had to sanction£500 million for private steelworks facing closure despite losing 3000 jobs out of 8000 (15 Sept 2023, the Guardian). Tata has demanded £1.5bn in subsidies from UK government for moving to greener production methods (2 Sept 2023, the Guardian).
Already, Pakistan has lost around $18bn in foreign exchange steel imports including $4.6bn in 2022 after closure of PSM in 2015 (6 Nov 2023, the Dawn). In his Geo interview, the Minister said that a new steel plant with viable capacity costs around $2.5bn and it only needs around 300 acres. Pakistan should use the resources to build five to seven steel plants across Pakistan with BRI opening new options so that steel industry can play its due role in strengthening country’s economy, security, foreign reserves, infrastructure, and foreign policy.
House Building Finance is heart of democracy, economy, and social mobility. History shows that golden triangle of national saving centres, HBF and city development authorities served common person from owning the house to living respectably with pension. They helped fight corruption by cutting living costs by 50 percent (house rent 35 percent, profit on pension savings 15 percent and 50 percent less cost of plot of city development authorities). It is democratic obligation of government to restore the triangle for the public against populism, banking sector and real estate mafias.
Outsourcing of farmlands needs a review. Like America, Pakistan needs to pass required farm and agriculture bills to keep agriculture under federal control as part of national security and review them every five years. America gives difference in market cost of farmer’s produce instead of subsidizing industry and uses Homestead law to keep generations of farmers working on government land while saving it from land mafia. With heavy subsidies in Agri-sector, America protects its national food security, balances urban-rural population, crime control, job security, democracy, and foreign policy.
Just like national shipping, Pakistan needs national airline as part of strategic vision. With 250 million population, domestic economy can run airline, airports, and allied infrastructures successfully. Privatization is not the solution to corruption and failure of good governance. Heathrow airport is incurring loss and competition watchdogs have rejected its high service charges despite being the busiest airport of Europe with 17 million passengers passing through it in first three months of 2023 (26 April and 17 Oct 2023, the Guardian).British Airways Received £2bn Government Loan for five years (3 Jan 2021, Simple Flying). Now British firm is assisting PIA privatization (British conglomerate to assist PIA privatization as airline’s financial woes persist 10 Nov 2023, Arab News).
PIA is part of corporate trade war against nation state which Pakistan needs to win. India is building Air India with a fleet of 470 Boeing and Airbus planes with a price tag of $70bn by outsourcing 1.2 million jobs to West including one million jobs in USA (Statement from President Joe Biden on Air India’s Historic Purchase of Boeing Aircraft 14 Feb 2023 White House).For Pakistan, it is not too late to fix its air industry because a lot that is wrong with air travel has its roots in deregulation (Why Airlines Do Not Fly to Your City and Other Problems Washington Caused, 14 Nov 2023, Politico).
Western governments have failed to impose 90 percent income tax and increase stagnant wages for last five decades. Workers in UK and US are annually worse off by £11,000 and $17,887while productivity grew by almost 62 percent (Oct 2022, Economic Policy Institute).Resultantly, America is losing $300bn in revenue annually. UK failed to collect £42bn in unpaid taxes (11 Jan 2023, the Guardian). Today, UK and US have £2.4T and $31.4Tdebt, respectively. To avoid all this, Pakistan needs tax policy, create jobs in public sector and enforce public sector job policies including pension in private sector. US has 37 trillion pension (401K) fund.
Like West, Pakistan needs to use subsidies for nation building. Before imposing tariffs, US government heavily subsidized US steel plants for building national infrastructure. US has doubled renewable subsidies to $15.6 billion to help consumers shift to alternate energy (2 Aug 2023, Reuters). EU gave €672bn subsidy to its member states to compete with America (US Inflation Reduction Act) with 77 percent going to Germany, France, and Italy (17 Jan 2023, Euro News). Thus, a combination of policies, national saving, pension fund and tax revenue can make Pakistan economic power, create jobs and cut BISP by 90 percent which privatization can never do.
—The writer is senior political analyst based in Islamabad.
Email: [email protected]
views expressed are writer’s own.
