Mian Mansha pins hopes on privatisation

Privatisation of public sector enterprises is the only resolve to all economic ills, and the country should not be afraid of privatising non-productive state assets, argued MCB Bank and Nishat Group Chairman Mian Muhammad Mansha on Sunday while addressing Pakistan Today’s Pre-Budget Seminar. Mansha contended that running enterprises institutions was not the government’s job, and that sensible change in management with ownership could turn these loss-making enterprises into profitable ventures and that too, within a relatively short span of time.
Citing the example of Pakistan International Airlines (PIA), he said that the state machinery believed that they could run the airline efficiently but it was evident from its performance how the government was running public enterprises. Mansha claimed that if the national flag carrier was handed to him, he could fix its issues in couple of days. Mansha referred to the examples of India and China to explain that the benefit of reforms is not immediately visible, but spread over a period of time; using India’s example, he said that former premier Rao initiated economic reforms back in 1992 – at a time when India was nearing bankruptcy.
China too transformed its economy in the last 20 years, with a consistent average growth of over 10 percent during this period. Pakistan had all potential and resources, but it required only a will to change, he asserted. The Nishat Group chief urged the government to plug the systemic loopholes which allowed people to free-ride. He categorically stated that the country had to get rid of subsidies and rental incomes, since these provisions discouraged legitimate businesses and an even playing field to stakeholders.
Mansha also highlighted the need to use available resources wisely. He gave the example of his own factory, where he substituted furnace oil with cotton stick for energy generation. He revealed that he was using some 370 tonnes of cotton sticks daily to generate energy, which had dramatically slashed his oil bill. He underscored that the country could generate around 6,000 MW electricity from cotton sticks that are usually burnt by farmers. On the other hand, he said, the country was facing a severe energy crisis and some 130 industries in the Punjab alone had been closed down due to shortage of electricity, he indicated.
Speaking about the success of MCB Bank, Mansha pointed out that MCB was contributing merely Rs 150 million in taxes while it was in government control, but this year, it had deposited Rs 7.5 billion in taxes. He highlighted that Nishat Group had created some 40,000 jobs in the country and had the largest garment exports worth Rs 50 billion – figures that provide a compelling argument for privatisation.
Mansha also stressed the need to pay taxes and supported the imposition of reformed General Sales Tax (RGST). He also advocated that to attain the economic growth targets, the government had to address the governance issues.