Profitization

Having long held a view that national assets were far too valuable to be handed over indiscriminately to the private sector, the spate of privatisation had always been frustrating and painful. A key irritant was the incessant use of the statement relating to government and business.
The view that privatisation is the panacea for all economic woes has always been illogical, in fact insane. Personally, privatisation has always been synonymous to selling the family silver, if a nation does not curtail its wants and continues to live beyond its means, creditors will force the sale of its assets eventually; in essence that is privatisation.
As mentioned earlier in this series on profit, it is necessary to debate upon all, as far as possible, tangents to this debate, in order to guard against unwarranted criticism just for the sake of criticism. The so-called success of privatisation is one such angle.
Pakistan's own experience on privatisation appears to have been less than satisfactory albeit the existence of any study comparing returns post privatisation with projected status quo returns is improbable. However since privatisation was a western fad, would it not be interesting to synthesise their current sentiments on privatisation?
So, quotes from newspapers: Wall Street Journal June 23, 2009 Say what you will about President Obama's effective nationalisation of General Motors, Chrysler, and AIG, at least his industrial policy is more open than the European Union's. While Washington is taking over failing companies by pouring billions of taxpayer dollars into them, Brussels - pushed by competing businesses - is slowly but surely nationalising successful companies merely by regulating them. The latest example of this "stealth nationalisation" comes courtesy of the European Commission's long-running feud with Microsoft over Internet browser software.
Wall Street Journal July 22, 2012 As things stand, Europe's banks are heading towards wholesale nationalisation. Greece's, Portugal's, Ireland's, Italy's and, once its banks properly account for the losses on their property portfolios, Spain's national debt loads are so onerous that default or selective default grows increasingly certain unless somehow these economies can be jump-started into strong growth. And because banks across the European Union are so heavily invested in national debt, default will wipe out their capital.
Pressenza, International Press Agency July 22, 2012 Despite being immensely popular among the people of Argentina, the Argentinean government's decision to nationalise the YPF (Yacimientos Petrolíferos Fiscales) oil company has continued to come under attack by those who obstinately promote extractive capitalism. The measure would nationalise YPF and restore 51 percent of the company's ownership to Argentina. Repsol, a Spanish oil company, has since the 1990s held the majority of YPF, an arrangement that the Argentinean public and government have increasingly disliked.
Reuters June 22, 2012 Angered by the nationalisation of a tin and zinc mine in Bolivia, global commodities firm Glencore said on Friday it may seek compensation domestically or abroad.
GlobalPost May 3, 2012 Bolivia has joined Argentina in announcing new plans to take back an energy company owned by a Spanish firm
Wall Street Journal June 27, 2012 Shareholders of Tokyo Electric Power Co approved the effective nationalisation of the embattled utility, which would have been forced into bankruptcy without government funding to handle the massive claims it faces from those affected by the March 2011 nuclear accident. Tepco management, led by Chairman Tsunehisa Katsumata, secured an agreement from the government last month to inject ¥1 trillion ($12.6 billion) in government capital in return for a 50.1% stake in the company.
Wall Street Journal June 26, 2012 South Africa - President Jacob Zuma vowed to end the economic monopoly that he said whites hold over Africa's largest economy, as he launched his bid to remain in charge of the ruling African National Congress. In an address on Tuesday to ANC members who set the party's political agenda for the next five years, Zuma promised to "democratise and deracialize the ownership and control of the economy." Black South Africans, he added, would be put in charge of more mines, banks and farms.
As they say the taste is in the eating of the pudding, and it is evident the privatisation pudding has turned sour. The dilemma is that proponents of this decades-old solution find themselves up the creek without a paddle. The argument now is that capitalism is the lesser of other evils, ie communism, socialism and feudalism. Point is at least the latter called a spade a spade!
Revisit the quotation at the beginning. Nationalisation of American industry is defended on the grounds that it's better than Europe's "stealth nationalisation" through regulating companies. Perhaps our revenue department needs to learn the art of "stealth tariff" in order to enhance collection and control national wants!
Guidance is available on WTO website, key extracts of which are as follows: The World Trade Report 2012 examines why and how governments use non-tariff measures, including domestic regulation in services. Such measures can serve legitimate public policy goals, such as protecting the health of consumers, but they may also be used for protectionist purposes.
The last quote, emanating out of a country which faced apartheid, is in fact more significant. The underlying current is that of reverting to the philosophy of Karl Marx. Let us hope that the above conclusive evidence can once and for all take care of the supporters of privatisation and free markets in the country and we can move ahead with utilising national assets for profit.