Privatisation in Pakistan

The privatisation process in Pakistan, sometimes referred to as denationalisation programme or simply the privatisation in Pakistan) is a continuous policy measure program in the economic period^[when?] of Pakistan. It was first conceived and implemented by the then-people-elected Prime Minister Nawaz Sharif and the Pakistan Muslim League, in an attempt to enable the nationalised industries towards market economy, immediately after the economic collapse of the Soviet Union in 1989–90. The programme was envisaged and visioned to improve the GDP growth of the national economy of Pakistan, and reversal of the nationalisation programme in 1970s – an inverse of the privatisation programme.

In the period of the 1970s, all major private industries and utilities were put under the government ownership in an intensified programme, called the nationalisation programme that led the economic disaster in Pakistan. Since then, the demand for denationalisation gained currency towards the ending of the government of Pakistan Peoples Party in 1977, although a commission was set up by General Zia-ul-Haq government but no denationalisation programme began until 1990.

The privatisation programme was launched on 22 January 1991 by Prime minister Nawaz Sharif in a vision to promote free-market economic principles, private-ownership and the mainstream goal to attract foreign investment in the country. But, as a result a good deal of the national wealth fell into the hands of a relatively small group of so-called business oligarchs (tycoons), and the wealth gap increased dramatically in the 1990s that halted the programme by Benazir Bhutto. Revisions were made in 1999 under President Pervez Musharraf as he launched a much more intensified privatisation programme with the watchful presiding leadership of his Minister of Finance and later Prime Minister Shaukat Aziz. The programme was ended effectively at the end of 2007 when ~80–90% of the industries were put under the management of private ownership.

The momentum and demands for denationalisation gained currency towards the end of the government of Prime minister Zulfikar Ali Bhutto and Pakistan Peoples Party who under intensified their nationalisation programme had effectively the government-ownership management in the private industries of Pakistan; it had built a strong public-sector with priority on cement, steel and fertilizers. After the end of government of peoples party, a white paper was issued by General Zia-ul-Haq's government, followed by setting up the commission under Pakistan Industrial Credit and Investment Corporation (PICIC) chairman N.M. Ukailie. However, only three industries were returned to its rightful owners, namely Eittefaq Group of Industries to Mian Mohammed Sharif whilst others remains under government controlled.

As an aftermath of 1988 general elections, Benazir Bhutto and the peoples party returned to power, promising to denationalised and replace with the industrialisation programme by means other than the state intervention.

By August 1989, a committee was established under the supervision of the Minister of State for Finance to oversee this initiative. With consultation from Rothschild's, the committee reviewed several state-owned enterprises for potential privatization, including Muslim Commercial Bank, Habib Bank Limited, Pakistan National Shipping Corporation, Pakistan International Airlines (PIA), Sui Southern Gas, Sui Northern Gas, and Pakistan State Oil. The objective was to integrate the savings of numerous private investors into the stock market, enhancing its stability and standards, a necessity identified since the early 1980s.

In May 1990, the government offered 10 percent of PIA's shares for Rs. 27.4 million, with a promise of a 12.5 percent minimum cash dividend for the following three years. Despite these efforts, other enterprises targeted for privatization remained unsold due to limited interest from the private sector. The process was interrupted when the government was dissolved by the president of Pakistan, resulting in new elections and the establishment of a coalition government.

The partial privatisation was kick started by Chief Minister of Punjab Province Nawaz Sharif who presided the liquidation of many industrial units put under provisional government to private sector. All industries based on Punjab government ownership were returned to its rightful owners on a mutual understanding; the prices on units returned to industrialists are still kept as "top secret" by the provisional government.