Privatization or denationalization means selling public assets (valuable properties) to individuals or private business interests. Nationalization means the taking over of private assets by the state or government. Wide-scale nationalization started in the country in 1972. Shipping companies, private factories, production centers, educational institutions, hospitals, etc. were nationalized. In 1978, the government started the denationalization programme under the guidance of the World Bank, the International Monetary Fund and US experts.
Western economists claim that private ownership brings greater efficiency and more rapid growth. According to them, privatization also increases production and lowers costs. It promotes, economic activity. The individuals get interested in earning more through work and investment The supporters of nationalization say that the government fixes the prices to the benefit of the people. The factories, schools, hospitals, etc. and services owned by the people or the State cannot overcharge for profit. Most organizations like the post office, telephone, and railways run for public good, not for personal benefit. We can see China where most industries, farms and educational institutions are run on socialistic principles.
Our experience in nationalization and privatization is a mixed one. A famous private industrial and mechanical company called the Beco (Batala Engineering Company) was nationalized in the 1970s. After nationalization, it was the Peco, a failed company, whose products were no more first rate. It began running into losses. However, there were publicly owned units that were running on a profitable basis with encouraging results, for example, the Ptcl, Habib Bank and PSO (Pakistan State Oil). The government-controlled colleges and schools that got autonomy or self-control became highly expensive. Unwanted universities sprang up adding confusion to disorder.
For security and national purposes, we need to have state-run organizations. For example, the State. Bank of Pakistan (that controls all banks), the Pakistan Ordnance Factories, the Pakistan Steel Mills and the public hospitals in all big cities should be owned publicly. We must have state-run TV channels, post offices and an airline or two to run or work free of private interference. We know that currency, foreign affairs, and defense have to be under the exclusive control of the federal (central) government for purposes of security and secrecy. Likewise, most key industries and institutions have to be under government control. No one can ask for the privatization of military training colleges, seaports, and airports.
We should favor privatization when it is to the benefit of the people. When different companies compete with each other to produce better goods at cheaper rates, private ownership is acceptable. When there is no need for competition, and the state can produce cheaper goods, government ownership is preferable.