Here
is one post from Shahid Mehmood's blog: http://shershahsuree.blogspot.com
I
was recently forwarded Asad Umar’s two part article on the subject of
privatization (which appeared in the NEWS) of public sector enterprises
(PSE’s). It is a continuation of the debate that has been generated in lieu of
the government’s decision to privatize a specific percentage of these bleeders.
Aside from a few positive suggestions over the methodology and how the intended
sale should be carried out, the article was a reflection of the author’s poor
understanding of factors that affect the economy and its working, especially in
the context of Pakistan. In short, Asad Umar showed a poor grasp of basic
economics.
Let’s
start with his question that why are profit making enterprises like OGDCL being
sold? But before raising this question, he should have asked himself why are
they making profits in the first place? The simple answer is that these are
government supported monopolies that face little competition. Couple this with
the fact of high demand for its products which ensures that these entities will
earn profit despite having the common bureaucratic setup. Anybody who has had
the chance of going to offices of these ‘profit earning’ organizations would
surely have witnessed the same level of corruption, inefficiency and
mismanagement that is the hallmark of state run institutions in Pakistan. This
is the same bureaucratic setup and functioning that Asad Umar derided in the
first part of his article.
Read more:
Sale
of PSEs, and Asad Umar's economics
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