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Uncertainty syndrome.

In view of the conditions in Sindh Army launched a major operation on October 20 in the name of |Operation Forest Storm'. There was a countrywide one day strike by newspaper owners and workers. No one was there to listen to these protest calls. Takbeer's editor house was set ablaze. House of Mr. Nisar Khuro deputy opposition leader in the Sindh Assembly at Larkana was also set on fire by some armed men. There is likely to be a large scale unemployment in the country as a result of privatisation. As large chunks of money would be blocked in the purchase deals of the privatised projects, investment in the new projects would be lacking and thus production would be stagnated.

Sindh is burning for the last so many months. Pakistan's oldest cigarette factory has been closed down in Karachi. Evasion of duty by some manufacturers and smuggling of cigarettes on mass scale were the reasons given for the closure. Office of Takbeer has also been forced to shift from Karachi. Journalists and newspaper offices are being attacked. There was a countrywide one day strike by newspaper owners and workers. No one was there to listen to these protest calls. Takbeer's editor house was set ablaze. House of Mr. Nisar Khuro deputy opposition leader in the Sindh Assembly at Larkana was also set on fire by some armed men. There was criminal silence in the power corridors over these incidents.

In view of the conditions in Sindh Army launched a major operation on October 20 in the name of |Operation Forest Storm'. Benazir Bhutto warned of Bangladesh like situation in which several thousand would die in a major operation.

Balochistan also started burning. Ethnic clashes between Balochis and Pakhtoons claimed at least 15 lives in Balochistan, Quetta and Khuzdar remained under curfew. There was dislocation of railroad network, suspension of business, closure of Balochistan University, colleges and schools and creation of bad blood between Balochis and Pashtoons who are bound together by bonds of brotherhood for centuries together. Trifling issue for the location of the Agricultural College either in Baloch or Pashtoon area has led to bloodshed and bad blood between the two ethnic sections of provincial population. Nawab Akbar Khan Bugti expressed deep concern over the deteriorating conditions of the country and feared that the country is being dragged towards the Martial Law. "If these conditions are not contained in time constitutionally then there would be neither Pakistan nor Pakistani society", Nawab Akbar Bugti said.

The privatisation exercise is proving aimless. Even the World Bank and the IMF have criticised the privatisation policy of the government. Businessmen and industrialists who are bidding for the projects are least concerned with the running of the projects. Their aim appears to be making quick buck on the sale and grab plots of lands to build high rise plazas on such plots. What is strange that the government has decided to privatise even the DFI's, some thing which is strange for a developing country where the state must retain its control over such institutions so as not to leave vital but not necessarily profitable development areas to the mercy of the profit seeking entrepreneurs. A policy of blatant privatisation will virtually reduce the role of the state to a dead horse.

In all units were offered for sale but there was no tender for 12 units. New industrial groups have emerged to purchase these units. Very few people knew about their credentials and among those who could not identify them were even the members of the Privatisation Commission Chairman of the Commission also pleaded ignorance. In case of Sindh Alkalis which is a prestigious chemical project of Pakistan, bids came from people who were not even remotely related to Chemical Plants.

The public sector units which are intended to be disinvented are estimated to be worth about Rs. 700 billion. (No independent audit of the networth of these units has been carried out). They constitute 40 per cent of the total fixed investment and contribute a value-addition of 6.9 per cent to the economy. Cumulatively their after-tax earning on capital comes to about 8 per cent. This is considered low for two reasons. First, most of this investment has been made out of borrowed funds obtained at 15 per cent, and secondly the cumulative return in the private sector is calculated at about 20 per cent.

The public sector units provided 47 per cent of the total tax and duties while total sales/excise revenue share of the public sector industries was 8.9 per cent during the year 1989-90. In the process of privatisation the social and political aspects have been completely ignored. For instance the 115 units on the privatisation list employ some 200,000 people. It is calculated that some 80,000 people would become jobless after privatisation. There is no clear-cut policy about the fate of the employees. An agreement with the All Pakistan State Enterprises Workers Action Committee has been signed. This agreement is more in favour of the employers than the employees. It does not guarantee security of job for the workers and only safeguards the interest after privatisation of the buyers.

The labour leaders are strongly opposed to the privatisation programme. They held the view that the IJI Government was out to destroy the working class. They felt that after plundering public money from cooperative finance corporations and banks a certain group was trying to have its hold on state enterprises. The agreement with the workers of State Enterprises is full of future promises so that the workers may remain calm while the state enterprises are being auctioned.

There is likely to be a large scale unemployment in the country as a result of privatisation. As large chunks of money would be blocked in the purchase deals of the privatised projects, investment in the new projects would be lacking and thus production would be stagnated.

The whole exercise of privatisation is slipshod, unimaginative and without any planning. One example is the withdrawal of National Bank of Pakistan from the privatisation list because of public pressure. Similarly the sale of Pakistan Telecommunication that the decision of the deferred. Experts believe that the decision of the Privatisation Commission to dispose of the family silver through a Juma Bazaar of the state owned companies is probably going to be our worse ever economic blunder.

Debate on Cooperative Scandal

The six day debate on the cooperative scandal in the National Assembly has badly tarnished the image of the ruling party. The absence of the leader of the house simply complicated the matter. It is now widely believed that the PM's closest political colleagues and associates have been playing with staggering sums of public money. PM himself has been established as one of the biggest borrowers. Zahid Sarfaraz charged the "Ittefaq Group owned by the PM took a loan of Rs. 800 million from National (NICIFC) and National Industrial Credit Corporation, the Chaudhry Group took a loan of Rs. 550 million. Sarfaraz also charged that with the collapse of the cooperative societies the Ittefaq and Chaudhry Groups evolved new fraud by buying Special Modaraba Receipts (SMRS) from the depositors at 50 per cent of the value to adjust their coops loans. Zahid detailed the list of textile and sugar mills built by the two industrial groups giving their registration along with the date of formation.

It was a dirty debate devoid of all, decorum, that suits the country's prestigious institutions like the assembly. The Assembly disgraced itself to such an extent that a special committee has been set up to expunge from the record all the filthy expletives used by the honourable members. Throughout the debate on the coops scam in the National Assembly those from the treasury benches have replied that they were constrained to borrow from the coops because the PPP government would not allow the banks to advance loans to them. Another argument advanced equally irrelevant was that the PPP too had loans advanced to its stalwarts from the coops during its 20-months rule.

The cooperative scandal is unprecendented in the financial history of Pakistan in which Rs. 26 billion of depositors money has been lost. Over one million depositors have been affected directly and over 4 million people indirectly. 35,000 people have become jobless. The economic backbone of the Punjab has been jolted. Winding up the coops debate for the PDA Chaudhry Aitezaz Ahsan tore the government case apart. "The plea taken by the government is immoral, unethical and unacceptable. It is a plea of confession, a guilt pleas yet they do not have the courage to resign" Aitezaz Ahsan told the house. He said there was a consensus in the House that a crime had been committed and everyone had admitted that it was a serious crime. To the explanations of the Interior Minister that Ittefaq and his group had not borrowed Rs. 11 billion but only Rs. 5 billion. Aitezaz Ahsan had said "It was like saying that I have killed a person not with six bullets but with three bullets". Presenting facts and figures of the coops, Aitezaz Ahsan said that the Chief of NICFC had himself admitted that the assets totalled Rs. 5 billion while the total deposits were Rs. 10 billion "Where have the rest of Rs. 5 billion gone". The collapse of cooperative societies ruined millions of expatriates workers. Mostly the workers put their small savings in these societies just to get a job in these organizations for their unemployed friends and relatives. As a matter of fact these expatriates indirectly helped the present government by sharing unemployment burden and directly helped by remitting foreign exchange. It is unfortunate that a large amount of loans outstanding against the Brothers Sugar Mills, National Sugar Mills and Phalia Sugar Mills of Chaudhry Groups has been reportedly adjusted with the NICFC through the buying of the withdrawal from its account holders. The big borrowers belonging to the ruling coterie adjusted their heavy loans through exploiting the financial needs of the poor depositors. An impartial probe by an independent judicial commission should be made in this big scandal and the culprits should be severely punished.
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Title Annotation:industrial chaos in Pakistan after army operation
Author:Haidari, Iqbal
Publication:Economic Review
Date:Oct 1, 1991
Words:1701
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