Nationalization in Pakistan:

The Nationalization process in Pakistan (or historically simply regarded as the "Nationalization in Pakistan), was a policy measure programme in the economic history of Pakistan, first introduced, promulgated and implemented by people-elected Prime Minister Zulfikar Ali Bhutto and the Pakistan Peoples Party in order to lay foundation of socialist economics reforms to improve the growth of national economy of Pakistan. Since 1950s, the country had a speedy industrialization and became an industrial paradise in Asia. But, as time progresses, the labour trade unions and labor-working class had strained relations with the industrial business oligarch classes, completely neglected the work conditions and failed to provide healthy environment to the workers class in the industries. The nationalization programme began on January 2, 1972 in a vision to promote economic democracy, liberalization, and a mainstream initial goal to put Pakistan in the line of state of progressivism. Ended effectively in 1977, the nationalization programme was again put forward by Prime minister Benazir Bhutto in 1996, and as of current Prime minister Yousaf Raza Gillani in 2012 who activated the programme in order to bring three major megacorporations (Steel Mills, Railways and International Airlines) under the government ownership to in an attempt to improve its structure and to alleviate its profitable process. Despite its success in formative years, such policy measure programmes met with extreme level of spontaneous demonstration, international and national opposition that left the disastrous effects on Pakistan's national economy until it was replaced with the privatization programme set forward by Prime minsiters Nawaz Sharif in 1990 until privatization programme's final execution in 2008 by Shaukat Aziz.

Nationalization phase (1971-1977):

Zulfikar Ali Bhutto (19281979) became President of Pakistan (197174) on December 21, 1971 after a disastrous end of 1971 war with India. The nationalization programme was implemented for the first time in the history of Pakistan and it was promulgated through three different stages. On January 1, 1972, on a televised speech to the nation, Bhutto and the peoples party's government promulgated the three-staged programme, under "Nationalization and Economic Reforms Order (NERO)", which nationalized all major metal industries, including iron and steel, heavy engineering, heavy electricals, petrochemicals, cement and public utilities except textiles industry and lands. The first stage of the nationalization programme integrated approximately 31 major industrial megacorporations, industrial units and enterprises, under direct management control of the government under 10 different categories of basic industries. The programme intended to assert public ownership over the industrial megacorporations, and to satisfied the labour unions in order to keep the industrialization peace in the country. Namely, the first stage of the nationalization programme integrated the selective industries approved by the peoples party's government and the nationalization programme provided the iron and steel, basic metal industries, heavy engineering industries, heavy electrical industries, assembly and manufacture of motor vehicles, tractor public utilities, including the electricity

generation, transmission and distribution, gas and oil refineries, under the management of public sector. After Bhutto becoming Prime Minister in 1974, the life insurance, vegetable oil industry, banks, shipping companies, oil companies and wheat, rice and cotton processing units were also nationalized forcefully. After the success of the first stage, the nationalization programme stepped into the second stage when it was launched on 1 January 1974, intending to nationalize the banking and financial industry and sector in Pakistan. Passed by the parliament, over 13 major banks, over a dozen insurance companies, two petroleum companies and 10 shipping companies were forcefully nationalized. The second programme was presided by Finance Minister dr. Mubashir Hassan who strongly maintained that: "wealth of the nation must be used for the benefit of the nation and cannot be allowed to be concentrated in the banks of a few individuals.". Banks ...which till (Monday) were the private property of a group are now public property.... All our big industries in the private sector were set up largely on the basis of financial accommodation provided by the banks and the financial institutions..... Because of the previous governments obsessions with GNP growth, (...)... industrial power was concentrated in the hands of few robbers barons On 1 April 1973, Bhutto held a meeting with members of Lahore Chamber of Commerce and Industry and maintained: Activity of public sector prevents the concentration of economic power in few hands and protects the small and medium entrepreneurs from the clutches of giant enterprises and vested interests. The third programme soon launched in July 1, 1976 when approximately 2,000 cotton, ginning and rice husking units, came under the nationalization programme. This programme met with administrative nightmare and wide spread public resentment. The third programme eliminated the role of middle men, and it was rumored that the producer as well as consumers of cotton, rice and wheat had been at the mercy of middle men trading in the milling of these commodities, with the result that producers were deprived of due share and consumer got poor quality and adulterated commodities at much higher prices. By 1977, the peoples party's government had had built a strong and sizeable public sector with priority on cement, steel and fertilizers.

Nationalization phase (1988):

In November 1988, Benazir Bhutto and Pakistan Peoples Party came to power for a second time. Benazir Bhutto promised to end the nationalization programme and to carried out the industrialization programme by means other than the state intervention. But controversially Benazir Bhutto did not carried out the denationalization programme or liberalization of the economy. No nationalized units were privatized, few economic regulations were reviewed. Although privatization continued under Benazir Bhutto's second government, the UBL Pakistan and railway consortium was nationalized by Benazir Bhutto in 1996. During the second government, the Peoples party intensified the government controlled on Pakistan Railways and Pakistan Steel Mills; all shares were kept under government management ownership. In 1998, Prime minister Nawaz Sharif emposed economical emergency after performing nuclear

deterrence in a direct response to India. All state-owned corporations and private sector industries' assets were froze by Nawaz Sharif after ordering to freeze the private assets under government-controlled in order to prevent the financial collapse. From 1999-2010, the nationalization programme was swiftly ended and effectively came to its end until 2011. The nationalization programme was again promulgated by current Prime minister Yousaf Raza Gillani on December 15, 2011 in order secure and rescue the former state-owned enterprises. The nationalization programme was put forward onto enhance the government ownership on Pakistan Steel Mills,[10] Pakistan Railways as well as Pakistan International Airlines. The current nationalization programme remains intact to restructured and made profitable while remaining within government ownership.

Opposition and adversaries:

The GDP growth rate stood between 3.88% until being dropped to 2.84% after the completion of nationalization programme.

The nationalization policies had disastrous effects on economy and had damage the confidence of investors in the country. The nationalization programme financially devastated 22 oligarch families, while one investor quoting: "industrialists not just lost industrial units to Bhutto's nationalization policy, they lost the urge to invest in Pakistan.". Major affectee included Nawaz Sharif who lost the major steel mill, the Ittefaq Group of Industries, and Chaudhry Shujaat Hussain's Gujrat Enterprises. All 25 shipping companies were merged with Pakistan National Shipping Corporation by Bhutto's nationalization programme; those who protested were imprisoned by the government. At an international level, the United States fully opposed the nationalization programme and marked it as "ill-considered" decision of the government. Former prime minister Nawaz Sharif, an affectee of nationalization process, gave vehement criticism and cited nationalization programme as "lamentable state of Pakistan". While on the other hand, the unnamed and anonymous United States embassy officer later further noted that:
During Bhutto's five years in Pakistan's helm, Bhutto had retained an emotional hold on the poor masses who had voted him overwhelmingly in 1970s general elections. At the

same time, however, [B]hutto had many enemies. The [socialist economics] and nationalization of major private industries during his first two years on office had badly upsets the Business circles... An ill-considered decision to take over the wheat-milling, rice-husking, sugar mills, and cotton-gaining, industries in July of 1976 had angered the small business owners and traders. Both leftists socilists and communists, intellectuals, students, and trade unionists felt betrayed by Bhutto's shift to centreright wing conservative economics policies and by his growing collaboration with powerful feudal lords, Pakistan's traditional power brokers. After 1976, Bhutto's aggressive authoritarian personal style and often high-handed way of dealing with political rivals, dissidents, and opponents had also alienated many....

Responsive reasoning:
The Pakistan Peoples Party's intellectuals on other hand, vigorously defended the nationalization programme. The Peoples Party maintained that the "nationalization" programme was indeed a "success" but the way it was implemented led to its failure. The Peoples' Party's members and cabinet officers, such as Dr. Mubashir Hassan, maintained that the Nationalization programme was party policy and the founding programme of the PPP in 1967, under "socialism is our economy" clause. Others supporting the arguments that the program was mandated by the people of Pakistan when they voted for PPP in 1970 general elections, and peoples party is proud of the successful implementation of the nationalization policy, and the fact that nationalization measures were protected for 10 years by the 1973 Constitution. Started in 1970, the nationalization programmes were precise articulation of that "selfconsciousness" and "self-recognition" expression. The nationalization programme completely abolished the monopoly and politicization of economy under few hands that was kept in close drawing-room politics. The nationalization program gave a though of "self-awareness" to labors, traders, and workers unions and to be more aware about the worker's rights and work healthy safe environment, as Suleman Akhtar maintained.

References:
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