On the one hand nationalization halted economic growth of the country and old players left the ground

which was taken over mainly by the Chanioti business community, particularly in Punjab, on the other, it opened the doors of new opportunities for Punjab to venture into areas previously not exploit by them, because of the monopoly of the Memons, Khojas and Bohries. In July 1977, Zia ul Haq government announced the denationalization programme, disinvestment and decentralization to build the confidence of private investors. In September, 1977, the government announced to denationalize about 2,000 Agro-based industries. Besides, offering a number of SOEs on Management Contract and introduced performance signaling system to improve performance of the nationalized units. In September 1978, Transfer of Managed Establishment Order was promulgated which empowered the Government to offer the nationalized units to the former owners. This Order clearly described the preemptive right of the previous owners for transferring management. However, in case there was no positive response from former owners, the government was free to transfer the management and control to any other party on whatever terms it considered fit. The Order also permitted the transfer of management of profit making units. Because of the limited scope of disinvestment policy and lack of any legal and institutional cover nominal progress was seen, i.e., only two industrial units were returned to their former owners. For disinvestment, in 1985 a Cabinet Committee was set up by the Prime Minister to identify units, who have simple technology and were making losses. The Committee comprised Minister for Finance as Chairman and Minister for Production and Minister for Industries were the members. The Committee formulated the procedures for privatization of certain SOEs working under the Ministry of Production. Some of the points included in the policy were: Competitive quotations would be invited. The negotiations are to be placed before the Committee for a final decision. This Committee decided to denationalize Tarbela Cotton and Spinning Mills and handed it over to a private party. Domestic Appliances Ltd and Pak Iran Textile Mills at Uthal were also handed over to private sector. However, inspite of government efforts Quality Steel, Karachi Pipe Mills, Pioneer Steel Mills, Special Steel Mills and Trailer Development Corporation could not be sold for want of an amendment in the Management Establishment Order, 1978. The overall progress was not satisfactory due to inadequate legal framework and lack of political will was the main hinderences in the process of denationalization. Denationalization- 1988-90: In December 1988, the Benazir Bhutto government hired a British firm N.M. Rothschild as consultant, to make a study on privatization and identify projects for privatization. They submitted the report in May 1989, namely Privatization and Public Participation in Pakistan. The report recommended privatization on Wide Spread Ownership basis. The wide spread ownership meant development of Pakistans capital markets by bringing first time thousands of small investors into share ownership. The report, however, warned that wide spread participation strategy should be carefully implemented to avoid over ambition on price. After analyzing more than 50 companies, the consultants short listed seven companies to be sold in the first batch for widespread offers. The units identified were Habib Bank, Muslim Commercial Bank, Pakistan National Shipping Corporation, Pakistan International Airlines Corporation, Pakistan State Oil, Sui Southern Gas Company and Sui Northern Gas Pipelines Ltd. The report recommended that SSGC should be the first unit to be sold. It also recommended that seven other units, a minority stake could be divested during the five year programme to the consortia of workers and private sector parties. The first three recommended units were Pak- Saudi Fertilizers,

Pak Suzuki and National Refinery. The report said that there is a need of putting money into the units to make them healthy and could be make attractive for the investor. Later on the proposal to privatize Sui Southern Gas was abandoned. However, it was decided in January, 1990 to disinvest 10 percent shares of PIAC amounting to Rs274 million, 30 to 40 percent shares of Pak-Saudi Fertilizer and 60 percent shares of Muslim Commercial Bank (later reduced to 49% shares). But this decision also could not been implemented, as recommended. Only ten percent shares of PIAC were disinvested in May 1990 at par value. Denationalization-1991-93: Assuming the office in November 1990, the Nawas Shareef government decided to give priority to privatization. The privatization policy covered industries, banks, financial institutions, telecommunications and infrastructure facilities. A Committee on Dis-investment and Deregulation was formed, which submitted its report in January 1991. The Committee recommended privatization of 118 units, which included 45 nationalized units taken over during 1972-74. The government set up a Privatization Commission on 22nd January 1991 to implement the disinvestment programme within the shortest possible time. Similarly, a Cabinet Committee on Privatisation, with the Minister for Finance and Economic Affairs as its Chairman, was constituted to approve the recommendations of Privatization Commission.