Nationalization

The Second Phase (1971-77), the Bhutto era, saw tumultuous economic changes in the name of social justice. Their repercussions continue to haunt the country even today. Nationalization of 31 key industrial units, 13 banks, over a dozen insurance, ten shipping and two petroleum companies was carried out, many of these belonging to the 22 families. The industrialists and entrepreneurs found the fruits of their labor snatched from them over-night. But, the shattering of their spirit was much more harmful to the nation. Not a single industrial project has been set up by any of these families over the past 28 years. From producers they have turned into distributors, spinners of yarn and processors of sugarcane, at best.

A minor business community, the Chiniotis, filled up the vacuum and shifted industrial activity to Punjab. Karachi kept growing physically, while employment opportunities kept shrinking with the shift of industries to the north. This spawned frustration and violence that, in its turn, has pressured further the Chiniotis of Punjab to take their businesses up north to safer areas. Allocation of land in duty-free areas, provision of infrastructure facilities at public expense and latent official support, worked as the pull factors in this trend.

Nationalization turned bureaucrats and politicians into businessmen and businessmen into politicians.

Bhutto's 1973 constitution provided no constitutional security of job to the civil servants. Their postings, transfers, promotions and even summary dismissals lay, for the first time in the country's history, totally at the pleasure of the prime minister. The en masse dismissal of senior officials by Bhutto on assumption of office Ð'-mainly on the recommendations of his party leaders- had effectively politicized senior bureaucrats. Insecurity germinated corruption, its incidence having been till then insignificant.

How nationalization has retarded Pakistan's economic growth, points out Shahid, can be illustrated by the simple fact that in 1947 Pakistan had inherited three aging vessels but their number increased to 75 when Bhutto nationalized shipping and placed all these vessels under the National Shipping Corporation. But, in 1992 when Nawaz Sharif allowed the licensing of private shipping, the number of ships with NSC had gone down from 75 to 25 only.