Zafar Masud with Shahzeb Khanzada on Great Debate Geo News
On the show ‘Great Debate’ on Geo TV, Zafar Masud with Shahzeb Khanzada on Great Debate Geo News, Mr. Zafar Masud while acknowledging the general consensus on privatization’s potential to spur economic growth, cautioned against a blanket approach. He emphasized the critical role of robust regulatory institutions and the importance of selecting private sector partners who prioritize long-term value creation over short-term gains.
Privatization in Pakistan: Mr. Zafar Masud Advocates a Cautious Approach Anchored in Strong Regulatory Safeguards
In a recent appearance on Geo TV’s program ‘Great Debate’ Mr. Zafar Masud with Shahzeb Khanzada, presented a nuanced perspective on privatization. While acknowledging the general consensus on privatization’s potential to spur economic growth, Mr. Masud cautioned against a blanket approach. He emphasized the critical role of robust regulatory institutions and the importance of selecting private sector partners who prioritize long-term value creation over short-term gains.
See also: Zafar Masud on Geo News Urdu Special – Privatization of Govt. Institutions
The Imperative of Strong Regulatory Oversight and Learning from Past Missteps
Mr. Zafar Masud with Shahzed Khanzada underscored the importance of establishing independent regulatory bodies with the power to prevent privatization from deviating from its intended course. He illustrated this point by cautioning against past experiences in places like Egypt and Mexico, where privatization in the telecommunications sector led to the emergence of powerful private entities, such as Carlos Slim’s Telmex in Mexico.
He added that such companies lacking strong regulatory oversight, were able to exploit their monopoly positions to drive up prices and limit service accessibility for the average citizen. This cautionary tale highlights the importance of establishing a regulatory framework that empowers independent bodies to ensure that privatized entities operate in the best interests of the public, delivering quality services at fair prices.
To further his argument, Mr. Zafar Masud with Shahzeb Khanzada acknowledged the World Bank’s studies that recognize the potential benefits of privatization, including increased productivity and reduced costs. However, he stressed the need for a balanced approach that acknowledges the potential drawbacks on social welfare. A strong regulatory framework, argued Mr. Masud, is essential to mitigate these negative consequences and ensure that privatization benefits a broad spectrum of society.
Building a Robust Regulatory Framework: A Prerequisite, Not an Afterthought
Mr. Masud went beyond advocating for strong regulators. Zafar Masud with Shahzeb Khanzada argued that establishing a well-defined regulatory structure should be a prerequisite for initiating privatization in specific sectors. He presented the case of Pakistan International Airlines (PIA) as an example. According to Mr. Masud, establishing a competent aviation regulatory body should precede any efforts to privatize PIA. Similarly, he argued for creating independent regulatory bodies for the diaper and Oil & Gas Development (OGDC) sectors before considering privatization in those areas. This ensures that the regulatory framework is in place to safeguard public interests and prevent potential manipulation by newly privatized entities.
Focus on Value Addition: Seeking Partners Who Contribute to Pakistan’s Growth Story
While acknowledging the potential benefits of foreign investment, Mr. Zafar Masud with Shahzeb Khanzada argued that the primary consideration during privatization should be the value a private party brings to the table. He expressed indifference towards foreign or local ownership, emphasizing the importance of the investor’s ability to contribute meaningfully to Pakistan’s economic development. In other words, the focus should be on whether the private entity will introduce new technologies, operational efficiencies, or crucial investments that can propel Pakistan’s economic growth.
Avoiding Rent-Seeking Behavior: Ensuring Privatization Benefits Pakistan
Finally, Mr. Masud warned against the pitfalls of “rent-seeking” behavior by private investors. Rent-seeking describes a situation where investors focus on maximizing profits through maneuvers and exploiting loopholes, rather than contributing to the growth of the underlying asset or the economy as a whole.
As an example, Mr. Zafar Masud with Shahzeb Khanzada cautioned against private equity ownership of utilities, which could lead to stagnation and hinder development if the private entity prioritizes short-term gains over long-term investments in infrastructure and service quality. He argued that such an approach would essentially exploit the existing assets without contributing to Pakistan’s development goals.
In conclusion of the discussion of Mr. Zafar Masud with Shahzeb Khanzada, Masud’s perspective on privatization in Pakistan serves as a valuable reminder of the need for a cautious and well-structured approach. Strong regulatory oversight, a focus on value addition from private investors, and avoiding rent-seeking behavior are all crucial for ensuring that privatization becomes a driver of inclusive economic growth in Pakistan. By adopting a measured approach that prioritizes long-term value creation, Pakistan can leverage privatization as a tool to strengthen its economy and enhance the well-being of its citizens.
