It has been publicly reported that the Fauji Foundation of Pakistan is foremost amongst the bidders for the soon-to-be-divested Pakistani State Oil (PSO) enterprise. Before one starts to question the logic of Fauji Foundation buying out PSO, it is worth considering why PSO is being sold in the first place. Along with the Oil and Gas Development Company (OGDC), PSO is one of the few profitable state-owned enterprises in the country, and in fact generates substantial profits for the national exchequer.
The International Monetary Fund (IMF), which has pushed long and hard for the privatisation of OGDC and PSO, typically claims that privatisation of state owned enterprises (SOEs) in poor countries such as Pakistan is necessary to address major structural inefficiencies in the operation of such enterprises, or, in other words, to extricate them from perennial losses. Therefore, the offloading of PSO and OGDC to the private sector would appear to be rather unjustified given that these enterprises have been raking in profits consistently in recent years.
The IMF, and its sister institutions, have also made a point in recent times to emphasise the fact that the Pakistani state does not have satisfactory revenue-generating capacity, and has demanded unequivocally that revenues be increased through a variety of means. On the ground, it has been the imposition of general sales tax (GST) on a number of basic commodities that has been the main source of increased revenue in recent times. Given that the resulting price increases of basic commodities have had clear poverty-enhancing impacts, particularly over the past four years, it is intriguing that enterprises such as PSO and OGDC are being offloaded, as such divestments will surely transfer the revenue-generating burden onto the poor.
The contradictory claims of the international financial institutions (IFIs) aside, the fact of the matter is that there is a frenzied rush to capture and control oil and gas resources the world over. The invasions and occupations of Afghanistan and Iraq are clear examples in this regard. In countries such as Pakistan, where the comprador elite classes facilitate the capture of such resources, it is hardly necessary to resort to direct military intervention. In the case of PSO, the corporate interests of the local elite, i.e. the army, represent the only economic logic at work, and this is quite acceptable to the IFIs and the global financial elite at large.
Perhaps one can argue that as an independent private entity, Fauji Foundation is entitled to invest in any sector it so pleases. Such an argument would be well and good if Fauji Foundation's interest in taking over the country's monopoly producer of oil and gas-related products represented an isolated instance. In fact, Fauji Foundation, and the host of other army-run corporate enterprises in the country, have come to control such a huge proportion of the economy that it would not be unreasonable to suggest that the army literally controls the destiny of a sizeable proportion of the country's population. In the circumstances, the global elite are more than willing to indulge the extravagances of the army so as to ensure that the former's larger geo-political interests are protected.
If, today, Fauji Foundation is buying up PSO, we should rest assured that some very important forces in the oil and gas corporate world are in the loop and are quite willing to facilitate the process. Needless to say, these same forces, even if they do not directly possess and control the oil and gas of PSO, will be able to exercise control over these resources through their cooperative partners in Pakistan. The once-upon-a-time-debates, like those over the unemployment that is caused by privatisation, no longer even command positions of semi-importance. This reflects just how bankrupt the capitalist system has become, and how the unbridled supremacy of the market has condemned the vast majority of people in the world to obscurity and indignity.
In the final analysis, the privatisation of PSO and OGDC, and who is buying up the companies, is neither truly about what is genuinely good for the economic health and sovereignty of the state, nor, and more importantly, about the needs of the people of Pakistan. In fact, ordinary Pakistanis will lose from this business of privatisation, as they have in the past from trade and financial liberalisation. The fact is that privatisation and liberalisation do not even take place in the way that their neo-liberal preachers suggest they will. It would be one thing if the global financial elite actually played by their own stipulated rules, but they do not even do that. Structural adjustment policies have not only impoverished Pakistan; such policies are also simultaneously designed to allow the local elite to maintain their monopoly on resource-allocation. For all of the talk of reform, Pakistan's economy still resembles a neo-colonial one that is based on the accumulation of resources by the rich and powerful, and the continuing exploitation of the working class.
It is indeed unfortunate that these sorts of issues do not make headlines in Pakistan, even when the army's political role is discussed every day. It would not be inaccurate to argue that the Pakistani economy now functions as one unit, with provincial economic autonomy virtually non-existent. The tall claims of the Legal Framework Order (constitutional amendments promulgated by President Musharraf in 2002 which gave a constitutional role to the armed forces, power unto the president to dissolve the National Assembly and whimsically extended his term as president) notwithstanding, those committed to the people of this country really ought to recognise the serious economic plunder that is taking place within Pakistan, led by the army, and given cover by the IFIs. Those who believe that democracy should reign supreme would do well to remember that there is no political democracy without economic democracy. It is time for those who can and will to take the road less travelled. That will make all the difference.