PTI's 'anti-worker' policies

Nothing has exposed the ruling Pakistan Tehreek-i-Insaaf's (PTI's) anti-worker policies than the surprise announcement on November 28, 2020 that over 4,500 employees of Pakistan Steel Mills (PSM) were being terminated with severance pay of an average Rs 2.3 million each. If this was not bad enough in the midst of the pandemic and its effects on the economy, including unemployment, Federal Minister for Industries and Production Hammad Azhar virtually drove the last nail in the coffin of PSM by announcing that 95 percent of its workforce was to be laid off. This statement lends weight to the apprehension of workers' union leaders and other activists that the real plan is to close down PSM for good (it has already been closed since 2015) and divert its 1,900 acres of land to other uses such as real estate development. Hammad Azhar has already indicated that 1,300 of these 1,900 acres would be leased out (to whom, for what, are still to be revealed).

PSM's sorry history is a lesson in our ability to turn a good thing into bad 'effortlessly'. PSM was set up under Zulfikar Ali Bhutto's government in the 1970s. Experts say the contention between the US and the former USSR to set up the mill, mooted as a plan in 1958, finally fell into the Soviet Union's lap since Washington and Islamabad's chequered history and many differences found sharp focus when Bhutto came to power after the 1971 East Pakistan debacle. The Soviet plan consisted of a phase-wise mills setting up, starting with an initial production capacity of 1.1 million tons of steel. During subsequent phases, training of personnel by the Soviets would go hand in hand with further investment in order to reach at least the minimal feasible production capacity of three million tons. It may be added that at 1.1 million tons, not even the fixed costs of the plant could be met. Industry wisdom also dictated a minimum capacity of three million tons to break even and further expansion to become profitable.

The later expansion phases never happened, being overtaken by political developments inside Pakistan, including Bhutto's incremental resiling from even his proclaimed Islamic socialism during his tenure, the brutally repressed opposition's agitation against the 1977 rigged general elections, and the simmering nationalist insurgency in Balochistan. Subsequent governments were either ignorant of, or chose to turn a blind eye to the original plan. Some, like General Ziaul Haq's dictatorship, considered even Bhutto's pseudo-socialism anathema, and Soviet friendship a difficult bone to swallow. Others, like Nawaz Sharif's three stints in power, wanted no truck with competition from PSM for their recently restored (by Zia) Ittefaq Foundries. Nawaz even destroyed the flourishing shipbreaking industry in Gaddani to leave the field clear for Ittefaq and other private sector steel firms. Needless to say, the phased original Soviet plan went abegging, leaving subsequent Pakistani PSM managements with the unenviable task of making a steel mill profitable that inherently fell short of even break even production capacity. Over the years, this production capacity did increase, leading for some years to PSM entering into the black in profitability, but this brief respite did not last.

Overemployment for political reasons has been the bane not only of PSM, but most state-owned enterprises (SOEs) in our history. PSM attracted the tender attentions in this respect of both the Pakistan People's Party (PPP) and the Muttahida Qaumi Movement (MQM). But the greater blame for giving in to such exorbitant job distribution demands falls on PSM's management that acquiesced in such unsustainable foolishness.

Ironically, it was the PPP government of 2008-13 under former president Asif Zardari that oversaw mismanagement in PSM to the extent that before they left office, the already inadequate production capacity (as explained above) of PSM was reduced to 40 percent. The remaining funereal rites of PSM were enacted by the following Pakistan Muslim League-N (PML-N) government of Nawaz Sharif by cutting its production to 20 percent, then six percent, and then finally shutting it down in 2015. Now PTI seems bent upon turning this industrial asset into probable real estate ventures for the rich, on the lines of its Ravi Riverfront project in Lahore and its drooling over Sindh and Balochistan's islands.

Whatever his other flaws, Bhutto must be credited with digesting and then attempting late Indian Prime Minister (PM) Jawaharlal Nehru's vision for his own country's development. Despite steel giants like the Tatas being in the field, Nehru realized that without basic heavy industry, India could not achieve a modern, thriving economy. He therefore set up heavy steel and engineering industries in the public sector since the private sector was by and large shy of such long gestation, low return projects. Derided later for the three percent so-called 'Hindu rate of growth', Nehru was later vindicated by India being able to make faster industrial and economic progress on the foundations of the heavy industry base inherited from Nehru.

Bhutto too tried to fill the gap in Pakistan's industrial development by overseeing the Pak-Soviet PSM plan, setting up heavy engineering industry in the public sector, nationalising in the process the commanding heights of the economy, including banking and insurance. However, the flaw in Bhutto's planning was the failure to address the lack of professional management cadre to run the SOEs, which under the bureaucracy to which they were transferred, went steadily south. This, by the way, and for the information of PM Imran Khan, had less to do with 'socialism', to which he ascribes our subsequent economic ills, and more to do with bureaucratisation under the misleading label of Islamic socialism. If Bhutto can be faulted, it is not for attempting leftist reforms in the economy, but for failure to consistently and incrementally transform Pakistan's economy in the direction of true socialism. Even his land reform was subverted and reversed by the mid-1970s by the influx of large landowners into the PPP.

The model of economic development that Pakistan has more or less consistently been following over the years is wholly dependent on loans and aid, both bilateral and from international institutional lenders. This has translated in practice into Pakistan benefitting when its 'nuisance' value or willingness to become part of US-led western imperialism's strategic plans for our region (e.g. the Afghan wars) are on offer. When the 'nuisance' value changes into a real nuisance (i.e. our acquisition of nuclear weapons) or Pakistan drifts away from western imperialism's desires (and into the 'alternative' embrace of, for example, China), this model runs into trouble. In any case, it has inherent to it a classic debt trap.

The working class is being forced to stir in the face of retrenchments (like in PSM), unemployment, inflation and the misery of being unable to feed families two square meals a day. Weakened by the assault since the 1970s on its unions and thereby ability to resist injustice and exploitation, the working class is nevertheless rising again in the face of unacceptable hardship. The PTI government's exposure of its anti-worker stance and policies promises another front against this government, one that touches the hearts of the poor, unlike the Pakistan Democratic Movement's (PDM's) limitation to the fight for a formal parliamentary democracy without any mention of even scraps from the table for the poor.

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Copyright Business Recorder, 2020