As India reels from the shock of the deadliest (non-state) terrorist attack in its history, the predictable volley of accusation and counter-accusations between the media and security establishments in Delhi and Islamabad is well underway. To be fair there have been a not insignificant number of voices that have avoided finger pointing, but nonetheless it would appear as if another prolonged stalemate in the somewhat stuttering 'peace process' is staring us in the face.

Be that as it may, what seems more important to dwell on is the reaction of ordinary people on both sides of the border. After all, both states have actively cultivated enmity for the best part of six decades and it is the establishments on both sides that remain the biggest obstacles to normalisation of ties and recovering the shared heritage of both peoples. If there is hope, then it lies not with the two states but with the two societies.

Unfortunately, both societies have been poisoned by the incessant nationalist propaganda that has depicted the other state and the people that reside within it as irreconcilable enemies. Anti-India sentiment has arguably been much more actively nurtured in Pakistan than anti-Pakistan sentiment in India, but the lack of exposure to Pakistani society and the rightward shift in Indian politics in recent times has meant that the differences are increasingly minimal.

So it is sad but true that mistrust to the point of hatred prevails among a large cross-section of both societies. In the aftermath of the Mumbai attacks, it is likely that many Indians, especially those that are exposed to the unending media frenzy that accompanies such high-profile incidents, are remonstrating in their living rooms with their political leaders on TV to sock it to Pakistan. Meanwhile, on the other side of the border, it would not be surprising if deep within many Pakistanis harbour a sense of suppressed glee, a perverse feeling that there is some justice in the world because the arch enemy is also beset with the scourge of arbitrary violence.

Things are, of course, different than even a decade ago. There is considerably more interaction between both peoples -- albeit much more so among the rich and famous -- and the nationalist propaganda is now somewhat tempered by less jingoistic accounts of the goings-on in the other country. So there is a small but growing constituency that maintains a commitment to ending the madness of more than 60 years.

The problem, however, is that 'realpolitik' continues to be the dominant framework through which Indo-Pak relations are conceived. In this calculus, Indians and Pakistanis cannot be friends; they can only share strategic interests. Of course, as far as the two states are concerned, the two peoples' strategic interests are diametrically opposed. Here it is instructive to think about how the United States will engage with the subcontinent in times to come, because what better exponent of pursuing strategic interests than the Empire?

With the coming to power of Barack Obama, it appears there will be a shift in the way Washington policy buffs conceive of the so-called 'war on terror' and Pakistan's role in it. Specifically, it seems that Washington accepts that Pakistan's primary strategic concern is India and, therefore, Pakistan will not make a genuine attempt to contain 'terrorism' until and unless its India concerns are genuinely addressed. Since Pakistan has always insisted that the 'core' issue vis-a-vis India is Kashmir, it is crucial to address this issue once and for all.

The premise of this prognosis, as with any such conception of 'realpolitik', is that 'India' and 'Pakistan' and even 'Kashmirí' are monoliths with clearly defined rational interests. In fact, the Kashmiris simply do not figure as real players in this sketch, and they have to simply hope that India, Pakistan and the ever so gracious United States of America bestow a favourable solution upon them. Meanwhile, there is no problematisation of the fact that the interests of both the Pakistani and Indian security establishments are quite different from the interests of ordinary working people in both countries.

Perhaps more importantly, such analyses demonstrate no appreciation for the sociology of 'terrorism' and the fact that the oppressive role of states -- in this case, both the Indian and Pakistani states -- is a major explanatory factor in encouraging the growth of renegade militancy. So, for example, if one thinks hard about the attacks in Mumbai, while it is eminently possible that Pakistani intelligence agencies played a role in supporting the perpetrators, there is more than likely some other precipitating factor that prompts individuals to challenge the state in this way.

Coming back to the original point, mapping 'strategic interests' is an exercise that is undertaken by generals in dark, smoky rooms; whereas in the real world, in which ordinary people are killed and maimed when such 'strategic plans' are put into place, there is much more than strategic interests at stake. Ultimately, only when it becomes clear to enough people in both India and Pakistan that they have internalised the way that the state views the other state even if they do not share interests with their state, will we be able to transcend the perpetual state of mistrust and hatred that prevails on both sides of the border.

Needless to say, this will not happen because it should. In fact, all measure of attempts will continue to be made by both establishments to prevent this realisation from dawning upon ordinary people. Unfortunately, random acts of violence like the Mumbai attacks provide an opportunity for states to reinforce their nationalist hegemony. It is telling that the Indian state was jolted far more by the massive peaceful protests in Kashmir some months ago than it has been by the jihadi groups that have operated there for almost two decades.

In any case, it is crucial for as many Pakistanis as possible to condemn what has happened in Mumbai in the strongest possible terms, and it is much better if Pakistanis demand answers from their own establishment about its continued support to jihadi groups rather than Indians asking the same questions and being greeted with defensive reactions. However, in much the same way, Indians must continue to demand accountability of their own state -- particularly vis-a-vis Kashmir -- so that the Pakistani state's propaganda that puts all Indians into the same basket can be debunked. It is high time everyone recognises that this is a two-way street.

As interpreted in Pakistan, the term 'privatisation' is a misnomer. Privatisation does not mean taking some state-owned enterprise and handing it over to a private entrepreneur or a group of entrepreneurs. Privatisation -- a concept introduced in the United Kingdom in the early 1980s by then-Prime Minister Margaret Thatcher and later also adopted by France and many other countries -- means offering state-owned shares in an enterprise for sale to the general public through a public offering of shares.

This ensures widespread public ownership of enterprises formerly owned by the state, prevents the concentration of wealth in a few hands, prevents corrupt practices such as the sale of state-owned assets for less than their true market value, gives management control to a board of directors elected by a large number of individual shareholders and allows the board of directors to hire professionally qualified individuals as the managing director or chief executive officer of the company.

Such a system of privatisation ensures transparency in the sale of state-owned enterprises, ensures that the privatised enterprises are well-run and thus have a better chance of becoming profitable companies that do not fiddle their books, and that faithfully pay all the taxes that are due from them. In other words, this system ensures that the formerly state-owned enterprises do not become private fiefdoms controlled by a few businessmen.

The shares of such companies can then be freely traded on the stock exchange, which, among other things, helps in the expansion of the stock market and making it more broad-based. It also helps to make the stock exchange into a well-regulated institution. Under this system, no individual is allowed to apply to buy more than a very limited number of shares at the time when the state offers its shares for sale to the general public, thus ensuring that no individual or small clique of individuals acquires ownership of huge blocks of shares.

When Thatcher introduced her privatisation scheme in the United Kingdom, no individual was allowed to apply for shares worth more than 5,000 pounds sterling. Laws were enacted to ensure that this was the way that the privatisation exercise was carried out. The laws were strictly enforced, with heavy penalties being imposed on any individual who attempted to flout the laws. Individuals who attempted to get around the laws by applying for shares in more than one name risked going to prison. There were many cases of such unscrupulous individuals being tried in courts of law and, if found guilty, being sentenced to prison terms that could extend to up to a year.

Due to such measures the government was able to successfully privatise a large number of state-owned enterprises in Britain in a transparent manner, without the process becoming tainted by shady practices.

In Pakistan, however, the privatisation exercise, which began in 1990 and has continued in fits and starts to this day, was structured very differently from the British model. Here, the break-up value of shares of state-owned enterprises was worked out by the Privatisation Commission and its consultants, and the enterprises were then put up for sale through tenders issued to pre-qualified bidders. The enterprises were then sold to the highest bidders. That, at least, was theoretically what was supposed to happen. In practice, however, there were cases where the highest bidder's bid was not accepted and the enterprise was sold to the second highest or even the third highest bidder.

For example, in one particular case involving the privatisation of one of the largest state-owned banks back in the early 1990s, the highest bidder's bid was rejected for no valid reason and the second highest bidder's bid was accepted. When the business group that had submitted the highest bid protested and threatened legal action, they were told by the government of the day not to make an issue of the matter. The government told them to let the matter go and said that they would 'compensate' the losing group in some other privatisation deal in the future. It was widely believed at the time that the government's decision was influenced by the fact that the leader of the group that had put in the second highest bid was a crony of some leading members of the then-government.

Government pressure was said to have been exerted on the highest bidder to withdraw their bid. They succumbed to the pressure and the bank was sold to the second highest bidder. There would have been much less chance of such shady practices occurring if the UK model of privatisation had been adopted.

Several hundred state-owned enterprises have been privatised in Pakistan over the last nearly two decades. Many of these cases, however, were marred by allegations of wrongdoing, including the under-valuation of the sale price and post-bid manipulation aimed at reducing the bid price and altering the terms and conditions of the bid, including giving the successful bidders more time to make payment for the shares bought by them than was stipulated in the bid documents.

There was much talk of the privatisation process ensuring what the government of the day referred to as a "level playing field". In practice, however, there were many vases where politically well-connected bidders were able to use their connections to ensure that the playing field was anything but level. This gave the whole privatisation process a bad name, with critics often alleging that the privatisation of state-owned enterprises was just another name for selling the 'family silver' at below its true value, with the national exchequer ending up as the loser.

A case in point was the then-government's decision to privatise the Pakistan Steel Mills (PSM), the country's biggest industrial enterprise. The deal was surrounded by so many allegations of wrongdoing that the transaction was eventually cancelled by the Supreme Court of Pakistan in a landmark judgment that also set out strict guidelines that had to be followed to ensure transparency in every privatisation deal.

Now, a whole bunch of state-owned enterprises have been put on the Privatisation Commission's list for sale to the private sector. The Privatisation Commission has recently advertised several state-owned enterprises to be sold to the private sector on a priority basis, including the Small and Medium Enterprises (SME) Bank; the national power construction company; and the Heavy Electrical Complex in Taxila.

Speaking on the sidelines of an awards ceremony on November 27, the Minister for Privatisation and Investment, Syed Naveed Qamar, said that the International Monetary Fund (which recently agreed to give Pakistan a 23-month standby facility of $7.6 billion), had set no specific conditions for Pakistan's privatisation programme. He said that the sale of state-owned enterprises would be carried out after "hectic consultations with the stakeholders".

It was not immediately clear what the minister meant by "hectic consultations with the stakeholders". Did he, for example, mean that the consultations would be done in a hurry or on a 'fast-track basis', as government officials like to say? Nor was it clear precisely what he meant by "stakeholders". Do these "stakeholders" include the employees of the state-owned enterprises, including the present top management of the enterprises?

When the now-cancelled privatisation of the PSM was in the works, its then-chairman wrote a 'confidential' letter to then-President Pervez Musharraf, reportedly protesting against the manner in which the privatisation was being carried out.

The contents of that letter have never been made public, despite the fact that the Supreme Court of Pakistan, which was hearing the case against the privatisation deal, had twice directed the counsel for the respondents to produce the letter in court. The counsel was reported to have informed the Court that the letter could not be produced before it, because its contents were "confidential", The Court told the counsel that nothing was confidential as far as the hearing in the Supreme Court was concerned and again directed the counsel to produce the letter.

The Court added that if the contents of the letter were "confidential", the Court could hold an in-camera hearing to examine the letter, but that it had to be produced in Court. For reasons best known to the respondents and their counsel, however, this unequivocal directive of the Court was ignored and the letter was never produced. All this, of course, generated a lot of speculation in the media about just what the letter said.

This speculation continued even after the case had been decided and the PSM sale had been cancelled by the Court. Some press reports, as well as some then-opposition politicians, speculated that then-Prime Minister Shaukat Aziz and some of his associates had a "personal interest" in seeing that the deal went through.

Other media reports said that one of the companies that was part of the consortium to whom the PSM was being sold was a Russian company, which was later bought by Mittal Steel, the world's largest steelmaker, which is owned by a London-based Indian named Lakhshmi Mittal. Some critics of the deal alleged that this was an attempt by Mittal to acquire control of Pakistan's biggest industrial enterprise "through the back door".

The present government recently announced that it intends to put up the PSM for sale to the private sector again, but this time strictly in accordance with the privatisation guidelines prescribed by the Supreme Court. One can only hope that the government meant what it said, and that it will direct the Privatisation Commission to proceed accordingly in order to ensure that the sale to the private sector is done in a totally transparent and fair manner.

In this connection, special attention needs to be paid to work out the market value of the company's assets accurately, including the market value of the thousands of acres of land owned by the PSM. Last time, the price of the land was said to have been grossly under-valued. This under-valuation was one of the main sticking points that had eventually blocked the deal going through.

Another state-owned enterprise that the government says it intends to privatise is the Qadirpur gas field. On November 10, 2008, Prime Minister Yousuf Raza Gilani approved a plan to privatise the Qadirpur gas field, which is a joint venture of the state-owned Oil and Gas Development Company Limited (OGDCL), Kuwait Foreign Petroleum Exploration Company, Pak Kuwait Petroleum Exploration Company and Pakistan Petroleum Limited (PPL). The OGDCL is currently the operator of the field and holds a 75 percent share, while the PPL holds a seven percent share.

A total of 29 wells have been drilled in the Qadirpur field, of which 24 are currently producing gas. The field was developed in three phases, increasing its capacity to 500 MMscfd from an initial 235 MMscfd. An expansion pocket, which is currently in progress and is scheduled for completion in the next few months, is designed to enhance sales to 600 MMscfd from 500 MMscfd. Development drilling at Qadirpur is continuing to maintain the gas supply to Southern Natural Gas Pipelines Ltd.

The proposed privatisation of the field has come in for much criticism from opposition benches in the Senate. On November 13, as the Senate resumed discussion on Pakistan's economic situation, the Qadirpur field dominated the debate. During the debate, Prime Minister Gilani informed the Senate that the gas field would not be sold for the time being.

Responding to criticism of the proposed sale of 37 percent shares in the gas field along with the transfer of its operational control to the private sector, Gilani said that Parliament would be consulted before such a decision was taken. Earlier, Privatisation Minister Qamar assured the National Assembly that the government would finalise the sale plan only after developing across-the-board "consensus" in the house. We will have to wait and see what happens. An old adage has it that there's many a slip between cup and lip.

Ahmad Rashid, a Pakistani journalist and writer, is the author of four books, including the best selling Taliban and Jihad -- the Rise of Militant Islam in Central Asia. In June 2008, he published his latest book Descent into Chaos: US Policy and the Failure of Nation Building in Afghanistan, Pakistan and Central Asia. He writes for the Daily Telegraph, the BBC, the Washington Post, El Mundo, The International Herald Tribune, the New York Review of Books and other newspapers worldwide, as well as for Pakistani newspapers.

Ahmad Rashid has been covering the wars in Afghanistan since 1979. He is a member of the Advisory Board of Eurosia Net of the Soros Foundation, a scholar of the Davos World Economic Forum and a consultant for Human Rights Watch. In 2004, he was appointed to the Board of Advisors to the International Committee of the Red Cross in Geneva. He is also a fellow at the Pacific Council on International Policy.

At the invitation of then-United Nations Secretary-General Kofi Annan, Ahmad Rashid became the first journalist to address the UN General Assembly in New York in September 2002. He also became the first journalist to address NATO ambassadors in Brussels in September 2003. After the 2001 war in Afghanistan, he donated one third of his book earnings to set up the Open Media Fund for Afghanistan, which has so far given about $400,000 in start up funds to different Afghan newspapers and magazines.

In 2001, Ahmad Rashid won the Nisar Osmani Courage in Journalism Award, given by the Human Rights Commission of Pakistan (HRCP). He was born in Rawalpindi and lives in Lahore with his family. The News on Sunday interviewed him recently in Brussels. Excerpts follow:

The News on Sunday: Is it true that you are currently working as an advisor to the US Central Command?

Ahmad Rashid: It is rubbish. This propaganda is unleashed by the Indian media. They have been claiming that I am in the United States giving advice to General Paetrus, but I am here in the European Parliament in front of you. I have been on a book tour in Europe for the past one month, but the Indians claim that I am in Florida with Paetrus. The US military personnel have met with me, but I am a Pakistani citizen and, therefore, cannot be an advisor to the US Central Command. The Indians seem to have been worked up about my references to Kashmir and how its resolution is important for long term peace in the region, including Afghanistan. For the last 30 years, the Indian media never noticed me. Now they are creating a negative image of me because of my article in The Foreign Affairs that has references to Kashmir, and that highlights how the Indian role in Afghanistan is negative to the peace and stability in the region.

TNS: Is it true that your article in The Foreign Affairs is behind US President-elect Barack Obama's recent reference to Kashmir?

AR: Well, I know for sure that Barack Obama has read my article in The Foreign Affairs and it has been subject of discussion among his aides. Therefore, I am glad that this line is being explored seriously. But let me be straight: I don't think the US is interested in Kashmir per se. However, there is new American realisation that resolution of Kashmir is important for the peace and stability in Afghanistan and, therefore, the whole region, because it would commit the Pakistani Army to fight the Taliban and other terrorist groups.

TNS: Where does this supposed new thinking in Washington place the Kashmiri resistance movement?

AR: The Kashmiri militant movement is badly fragmented; some have left it, while others have joined the Pakistani Taliban and are involved in terrorism within the Pakistani territory. The Pakistani military establishment created these groups and now they are the biggest problem for the country's stability. The Kashmiris have also had enough of these jihadis; the nature of their movement is more nationalistic than jihadi. The recent mass uprising has proved that the Kashmiris want to surge ahead in their struggle without jihadis. Therefore, the Kashmiri militants who still want to take up the Kashmir cause should use political means. Similarly, Pakistan should follow Saudi Arabia's example of re-educating the militants. The Saudis have already re-educated and reintegrated about 1,000 former militants and Pakistan can do the same with the Kashmiri militants.

TNS: So could Kashmir see some change?

AR: There is going to be a shift in the US policy under Obama. The Bush era is dead and this could offer Kashmiris a new chance. The recent mass uprising in Kashmir is great. It has given the Kashmiris new visibility and legitimacy that they now need to exploit. The uprising has shown that the Kashmiris are not driven by jihadis or by Pakistan. Now the onus is on the Kashmiri leadership to make a pitch to the Indian government and invite it to address the Kashmir issue. These leaders must show an Obama-like attitude and defy the odds against them. In the coming months, there is going to be international pressure on India to sort out the problem, but Kashmiri leaders need to place themselves well. India must also understand the change and cease the moment to play its part in building long term peace in the region.

TNS: What about Pakistan?

AT: Let's be honest. Pakistan has shown utmost flexibility and moved away from its traditional stand on Kashmir, but India has not matched this. India has failed to address even smaller issues like Siachen.

TNS: How is Kashmir connected with Afghanistan?

AR: The main problem in Afghanistan stems from sanctuary and recruitment of the Taliban inside Pakistan. On the other hand, Pakistan feels highly insecure because of India's growing influence in Afghanistan and, therefore, is reluctant to act against the Taliban. Insecurity comes from India rather than Afghanistan. To overcome the crisis in Afghanistan, the issue of Kashmir has to be addressed first. This will make Pakistan secure and raise its stakes in the 'war on terror'.

TNS: You advocate Chinese involvement in Afghanistan. How will that change the situation?

AR: China made a very positive contribution during the North Korean crisis. It should be seen as a partner with legitimate concerns and energy interests in the region, and it could bring investment too. Moreover, China is as concerned about the spread of Islamic extremism as are the West or Russia; therefore, it could play a very positive and stabilising role.

TNS: What about the Chinese contribution in Kashmir?

AR: I don't think they have a role and I don't think they are interested in a stake in Kashmir. Kashmir is very sensitive for the Chinese and they even withdrew from supporting Pakistan's position on the issue. However, they will closely monitor the subject and remain vigilant.

TNS: There are already voices that the new Pakistani government is failing on many fronts, including security. What is your view about this?

AR: You need to give it time. Democracy was obliterated for such a long time in Pakistan that it will need time to function properly and develop mechanisms for course correction. I believe that even a bad democracy is better than a dictatorship.

The tragedy of 9/11, the resulting 'war on terror', economic crisis at home and abroad, the judicial crisis, terrorism, by any standard Pakistan is passing through tumultuous times. The nation is split between two extremes: the radical mullahs and the equally radical liberals, who both believe that they -- and only they -- have the answers to the nation's problems. The politicians on the other hand, regardless of their political affiliations, are mere extensions of this intellectual debate.

The tussle between the modern and the faithful is not new. The Oxbridge-educated politicians who created this country never saw eye-to-eye with the conservative Muslim base. Post-independence, the realities of political power play allowed faith-based parties to assert themselves. Successive martial laws increased the power of these faith-based organisations, while the liberal, educated elite shunned politics. This also provided the landed and industrial classes with an opportunity to grip the political power.

Pakistan today lacks identity, and both the liberals and the mullahs claim a monopoly on what it is and should be. This identity crisis has allowed violence, militancy and bigotry to blossom, as both groups simply put the blame on other. Disassociations and accusations follow, while the government attempts to pacify the two sides. The Lal Masjid affair and the increase in violence since then have put our identity in doubt.

The judicial crisis, which gripped the society at the same time, saw an outpouring of civil society activism. During this period, those arguing for the supremacy of law and the power of religion were both claiming to rid the society of evils. Recurring in their arguments is the theme of social injustice. Social problems are obvious, though solutions are hard to find. For those who can offer solutions, a grateful nation awaits. In the meantime, the divisions that these seemingly irreconcilable positions are creating are hampering any possible progress. Rather than being part of the solution, both sides are part of the problem. A stalemate has been enforced for many years now. The nation is split between an island of modernity and a sea of disparity.

For those who protested and supported the restoration of the chief justice (this author included), the problem the state faced was focussed on one person: General (r) Pervez Musharraf. It was at the time widely believed that his removal would somehow unravel a period of justice for all. Later this notion was situated with the idea of a welfare state, a state which is compassionate and eager to solve the people's problems.

The only problem was that the lawyers' movement provided an opportunity to many people to associate their personal biases against certain beliefs and opinions, which were otherwise irrelevant to the restoration of the chief justice itself. As civil society lay invigorated, and terms like 'supremacy of the law' were being thrown around, no one stopped to consider how the very same people broke traffic signals or refused to pay taxes. For some reason, social ailments are always part of a bigger picture in the great 'good' versus 'bad' debate. Justice does not only flow from the top to down; individual actions do have very serious consequences.

The same environment that called for 'supremacy of the law' also fuelled the militancy that has engulfed our nation today. As more and more resources are diverted from rural to urban centres to maintain the illusion of progress and modernity, the socioeconomic conditions are helping fuel terrorism. The use of Islam to justify an abhorred act is not to equate Islam with violence; rather, it is the only way by which individual groups are able to justify actions against those who they seem as oppressors.

After 9/11, commentators and the public at large hoped that this would be an opportunity for the United States to review its policies and behaviour towards other countries. The US did nothing of the sort and wars in Afghanistan and Iraq followed. Since then, commentators around the world have been criticising the US for its unilateral behaviour and disregard for global opinion. Are we in Pakistan too arrogant to believe that, as our nation faces terrorism on nearly a daily basis, those who sit in the driving seat of the ideological, political and economic bandwagon would re-evaluate their policy towards the rest of the nation?

Militancy in Pakistan is for now localised, a response to the so-called 'war on terror'. However, as the insurgency in Balochistan has shown, there is a great scope for the development of the Pakistani Taliban into a religio-nationalistic movement. The projections made recently in a study about Pakistan in 2040 point to how demographic changes and the almost certain maturity of the political wings of the Taliban are threatening the nation's unity.

For those who would rigidly stand for their individual and often simplistic beliefs, consider this: there is not one nation in the world where terrorism has been contained under the barrel of the gun. After a century of violence, Northern Ireland ended its vicious cycle of violence by agreeing to disagree and working together. More recently, the insurgents in Nepal, the Maoists, gained the apex of political power. And have we already forgotten how a bloody insurgency led to the succession of East Pakistan in 1971.

What is currently happening in Pakistan has happened before. In neighbouring Iran, a pro-US, westernised Shah ruled over a country that was extremely poor. The tiny elite that ruled over the nation had physically, culturally and socially alienated itself from its masses. The state policy, in trying to maintain the status quo, effectively oppressed the masses. While the Shah professed innocence and his wife claimed that she and her children lived an average Iranian lifestyle, there disconnection with the masses was clear. Religiosity did not overcome Iran in 1979; religion only offered a means to topple an unpopular government. The increasing polarisation in the country is taking us towards a similar fate, though ours would be much more complicated because of the so-called 'war on terror', the presence of nuclear weapons and other geo-political concerns.

Therefore, there is an urgent need to re-evaluate our own position and consider how our individual behaviour may be contributing to injustice in the country. We must condemn violence in all its forms, though at the same time realising that mere containment is not a solution. The religious right and the liberal elite, both of which are represented to some extent in the government, must push for greater dialogue that helps develop a national identity with which the majority of the nation can identify.

(Email:s.n.el-edroos@lse.ac.uk)

special report

The recent statement of Federal Minister for Privatisation and Investment Syed Naveed Qamar that privatisation of public sector entities will remain the cornerstone of the economic agenda speaks volumes of the government's stance on the issue. Elaborating his point further, Qamar said the private sector had the capability, expertise and resources to run various businesses, while the government should focus only on policy matters. He stressed that the privatisation process brought efficiency, enhanced production, attracted fresh investment, created new job opportunities and generated revenue for the government.

Ideally speaking, these virtues of privatisation make it a logical choice for every government trying to promote fair competition and equitable distribution of wealth and resources. Unfortunately in Pakistan, however, the situation has been totally different and the sale of public assets has been propelled by the intention to oblige / gratify a bunch of individuals.

The previous government often expressed its stance publicly that the state should be out of business and the private sector allowed to run the show. But what it did was that it handed over the management shares of Pakistan Telecommunication Company Limited (PTCL) to Etisalat, a telecom company owned by the UAE government. This way, the Government of Pakistan did move out of private business, but allowed a foreign government to fill the vacuum created by its exit.

The present government, very much like the ones that preceded it, has been compelled by economic pressures to privatise several state-owned enterprises, because this is the easiest way to generate funds for retiring foreign debts. But it is even more important to ensure that the privatisation process is not carried out in haste and the assets are disposed of only if the price offered is worth the value. Secondly, the priority of the government should be to sell those units first that are not performing well or have been shut down due to the lack of capital. At the same time, the negative fallouts -- such as the loss of jobs and the acquirer's endless pursuit to make profit through the control of huge enterprises -- have to be minimised.

If we take a look at the privatisation done during General (r) Pervez Musharraf's regime, we find that there was an attempt on part of the government to get rid of even those assets that were earning huge profits. For example, it chased the UAE government all the way to its territory in a bid to convince it not to withdraw from its earlier commitment to buy 26 percent management shares of PTCL. The UAE government's reluctance was difficult to understand, considering the Government of Pakistan's bias in favour of Etisalat. Subsequently, the government had to change the terms under which the bidders had made the offer and Etisalat was allowed to pay the bid money ($ 2.6 billion) in five years instead of upfront, as had been decided earlier.

This favour had come at a time when Etisalat was on the verge of deciding to withdraw its bid and drop plans to acquire management control of PTCL. Several other terms were also relaxed by the government to stop Etisalat from backing out of the deal. The critics of this deal are of the view that if the terms were to be changed, the bidding process should have been carried out afresh: it is possible that the unsuccessful bidders would have been able to match or surpass the bid by Etisalat if allowed to make the payment in five years.

What happened in the case of Pakistan Steel Mills (PSM) was even more appalling. The country's largest state-owned entity was sold for a mere Rs21.67 billion, despite the fact that only the 4,457 acres of land owned by the PSM was worth more than Rs250 billion. The gross irregularities committed in the deal were exposed by the Supreme Court, which rendered it void in its decision. Capital PSMC SPV (Mauritius) Ltd was mentioned as buyer of the PSM by the Privatisation Commission, irrespective of the fact that it was nowhere on the scene when the bidding process was in progress. The sale had been finalised ignoring the fact that the PSM had generated Rs31 billion in revenue in the preceding year and its pre-tax profit for the same year was Rs10 billion.

A major negative effect of privatisation is retrenchment of employees of privatised entities and the denial of due benefits in case they decide to retire voluntarily. In fact, the history of anti-labour legislation carried out by successive governments coincides with the history of privatisation in Pakistan. It was in the early 1990s that the Nawaz Sharif government launched its massive privatisation drive and imposed restrictions on activities of trade unions in banks during working hours.

This made trade unions redundant, because there was no senior official present after the working hours to listen to the grievances of the workers. The purpose of putting a check on these unions was to minimise the chances of resistance against privatisation of nationalised banks at that time. Later more laws were also introduced to discourage trade unionism, including the Industrial Relations Ordinance (IRO) 2002 that literally ended the role of Collective Bargaining Agents (CBAs) in organisations and reduced job security to the minimum. It is hoped that the present government is aware of these facts and it would be able to reduce the collateral damage caused by privatisation deals.

Nevertheless, the privatisation plan also has supporters. Talking to The News on Sunday, Dr Salman Shah, who was advisor to the prime minister on finance during the previous regime, says the best way for the government to generate cash reserves is by selling off assets worth $3-4 billion. These assets are worth hundreds of billions of dollars and disinvesting this much amount will not cause any harm, he insists. Dr Shah believes that this is better than wooing world powers to extend financial help to the country through the 'Friends of Pakistan' initiative.

On the other hand, Tahir Parwaz, spokesperson for the Privatisation Commission of Pakistan, tells TNS that there is no hurry on part of the government to disinvest public assets. He says the minister for privatisation and investment has said that the government wants to follow the model of public-private partnership (PPP) and will not let the national assets go altogether. Parwaz says the arrangement will be such that the management control will be given to the successful bidders, while the ownership of the assets will remain with the government. At the same time, the government will play the role of policymaker to ensure that these enterprises perform in an ideal situation.

Parwaz disagrees with the assertion that privatised entities have not performed well over the years. "We can take the example of nationalised banks that were privatised in the 1990s. At that time they used to receive financial help from the government, but today the government is earning dividends from the stakes that it has in them," he argues. This time, calculated steps will be taken during the privatisation process to ensure a win-win situation for all stakeholders, he assures.

Privatisation can be looked upon in two ways: as a doctrine and as a policy. As a doctrine, privatisation in an important element of the free market philosophy or laissez faire. The soundness of privatisation as an economic doctrine depends on that of the free market philosophy, which is based on three assumptions. One, the basic economic problem is to ensure allocative efficiency, which is producing the right mixture of goods and services at the minimum cost. An equitable distribution of resources or incomes is not an economic problem. Two, allocative efficiency can be achieved only if scarce resources are rationed by a price mechanism. The allocation of resources on any other basis breeds inefficiency. Three, the right price is one that is determined by interaction of the forces of supply and demand.

Prices above and below the market prices produce surpluses and shortages, respectively. In short, this implies that the economy performs best when it is left to market forces. Government intervention in the economy far from improving things makes them worse. This means that the government should have a minimum, if any, economic role. The best government is the least government. Free market philosophy has come in for criticism on more than one ground. In the first place, the market mechanism works to its full potential only when markets are characterised by perfect competition -- a situation which exists only when no firm or a group of firms is large enough to affect market prices.

In practice, markets are generally characterised by imperfect competition -- monopolies (single supplier) or oligopolies (few suppliers) -- where firms can, individually or by collusion, manipulate prices by reducing outputs. This combination of higher prices and lower outputs, which is a case of market failure, breeds inefficiency and is thus a strong reason for the government's economic role. That is why even the most vehement exponents of free market philosophy admit that some government action is necessary for curbing the powers of monopolies and cartels and promoting competition. Creation and manipulation of consumer needs through powerful advertising also raises question about allocative efficiency in a market economy.

In the second place, since in a laissez faire economy allocation is done by prices, market forces cause resources to be allocated to production of goods and services preferred by the affluent section of society. Such possibility is greater in the absence of a large middle class, which is the case in most developing economies including Pakistan. Hence, benefits of allocative efficiency in a market economy are likely to be at the expense of some segments of society. This brings us to the problem of equity or a fair distribution of resources.

The problem of equity, which is dismissed as simply a non-economic problem by the exponents of laissez faire, is important for two reasons. One, a disregard of the vital needs, such as health and education, of low-income or poor sections means that the society will be deprived of a potentially useful large human capital leading to an inefficient outcome. Two, concentration of resources, which market forces left to themselves inevitably effect, breeds social discontent and unrest. Such an outcome is also not conducive to optimal working of the economy.

These two limitations of the market economy call for a strong economic role of the government, encompassing not only regulation of the economy but also employment and provision of basic services to the people at low cost. Hence, in both theory and practice, the best economy is the mixed economy that does not present a choice of having either a public or a private sector, but has both. Therefore, privatisation of public assets is not inherently a virtue. If state-owned enterprises (SOEs) have to be privatised, then it should be as a matter of policy not philosophy.

Privatisation as a policy needs to take into account certain considerations. The foremost point is that privatisation is useful if it promotes competition resulting into provision of quality goods at low price to consumers. However, the same purpose may be achieved not by selling SOEs but by dissolving barriers to entry and exit in a given industry. If such barriers exit, privatisation will not promote competition; rather, there will only be a change of ownership from the state to the private sector.

A state monopoly will be replaced by a private sector one. The point to note is that allocative efficiency is promoted not by privatisation per se, but by competition. For instance, telecommunication and electronic media sectors in Pakistan have improved not because of privatisation but because of entry of several firms in both sectors. On the other hand, the privatisation of KESC has not resulted into improved power supply in Karachi.

Political corruption can be an argument for privatisation. For instance, in case of Pakistan, state-owned banks were forced to dole out loans to rulers and their cronies, who had no intention of paying them back or even using them for the purpose the credit was provided. The problem of bad debt made a strong case for privatisation of the banks, which by and large have performed significantly better under the new management. The problem however is essentially one of having a corrupt political / bureaucratic culture.

In such a culture, privatisation itself presents an opportunity for corruption and lack of transparency. Public assets may be sold at less than market price to the cronies of decision-makers or to those who lack the expertise or intention to run these units in a competitive manner. In Pakistan's case, privatisation of some major enterprises, notably banks, has invited such allegations. And one may not forget the Supreme Court's landmark decision in 2006 against privatisation of the Pakistan Steel Mills.

Another argument for privatisation is that working and decision-making in SOEs is not market-based, thus making them inefficient. The SOEs may be over-staffed or forced to charge a price much lower than the market price. The argument is partly sound. Market price is not always the right price. Provision of basic services like health and education needs to be subsidized; otherwise, those at the lower end of the social stratum are not likely to have adequate access to them. Public schools and hospitals providing subsidised services suffer losses rather than earn profits, but society as a whole gains.

Similarly, while it may not be economical to locate certain projects in far-flung areas, the need to develop and alleviate sense of deprivation in those regions makes a strong case for undertaking the economic activity. Privatisation of such SOEs will have enormous social, political and economic costs. There can be a case for privatising chronically unprofitable SOEs that are not providing basic or strategic services. But even in that case importance needs to be given to the privatisation's effects on competition, transparency, and the managerial and technical expertise of the bidders in providing such goods or services.

The sale of SOEs can be used as a cash cow for the government. The Privatisation Commission Ordinance 2000 provides that 90 percent of privatisation proceeds will be used for debt retirement and 10 percent for poverty alleviation. However, this is a use of, rather than justification for, privatisation.

The privatisation programme was announced in 1990 by the second government of the Pakistan People's Party (PPP), which in its earlier stint in power had nationalised major industries and banks, as part of the IMF-sponsored structural adjustment programme (SAP). This, however, does not mean that but for the IMF programme Pakistan would not have undertaken privatisation.

The winds of change blowing across the globe in the wake of the eclipse of the centrally planned economic model were also partly responsible for privatisation in the country. However, before any privatisation was done, the PPP government was sacked and it was left to the government of businessman-turned politician Nawaz Sharif to launch a privatisation programme, which was continued by successive regimes. According to official statistics, so far some 166 privatisation transactions have yielded Rs475 billion. These transactions have taken two forms: transfer of ownership through majority or 100 percent shares, and sale of minority shares in the stock market. In one instance -- privatisation of PTCL -- the government transferred control of an enterprise to a private company by selling it 26 percent shares. The present government is also committed to selling SOEs, though it was forced to stop privatisation of Qadirpur gas field recently.

A Telgu proverb says: "Bringing up a girl is like watering the plant in your neighbour's garden." Bitter but true. The condition of women in most developing countries like Pakistan can be best understood in the light of this proverb. The women in Pakistan, whether they are based in rural or urban areas, face multiple forms of violence, including sexual violence, domestic abuse, burning and disfiguring through acids, beating and threatening, honour killings, custodial abuse and torture, dowry-related violence, rape, female genital mutilation, etc.

A multifaceted issue, which finds its roots in biological, psychological and social fabric of the society, the effects of violence can be devastating for a woman's reproductive health, as well as for other aspects of her physical and mental well-being.

In addition to causing injury, violence increases women's vulnerability to a number of other health problems, including chronic pain, physical disability, drug and alcohol abuse, and depression. Women with a history of physical or sexual abuse are also at increased risk of unintended pregnancy, sexually transmitted infections and adverse pregnancy outcomes. Yet victims who seek care from health professional often have needs that providers do not recognise, do not ask about and do not know how to address.

In this scenario, women activists and health experts now term the death of a woman in pregnancy as a form of violence. "The women face discrimination and neglect at all levels in our society, the consequences of which are evident in their poor health indicators. This issue can be addressed only by increasing literacy, and raising awareness about women's empowerment and their rights," says Dr Samra Shaikh, who is working to improve women's reproductive health.

Recently, a mother of 11 children was brought to a government hospital at two in the night with non-progressive labour. Weak, pale, malnourished and anaemic due to multiple pregnancies, she could not succumb to the excruciating labour pain and died. Holding the youngest child, her husband said: "Allah ko yehi manzoor tha (This is what Allah had ordained for her)." However, nobody can understand the fate of those 11 children who were left stranded in the absence of their mother. The husband might get another wife, but the children will never get their mother back.

According to senior gynaecologist Dr Arifa Izhar, the awareness level regarding women's health is alarmingly low in our society. Most women are anaemic and weak, and they suffer from odaema (swelling of body due to water retention during pregnancy) and hypertension. Because of multiple pregnancies, these women are frustrated but they hardly follow doctors' advice. Dying like animals in hospitals, women in our country are buried as unceremoniously as they are born. After all, it is a routine that a woman dies during child birth.

The women in Pakistan experience discrimination since their childhood. Nobody celebrates their birth, they are given the left over food, they are not educated on priority basis and they are handed over in marriage without their consent. At times, the women serve as a good commodity to be exchanged in return for a beautiful bride for their brothers, fathers or uncles. During pregnancy, they are not given required medical care or nutrition. While giving birth to a child, unavailability of health care renders the women weak and even causes disability or death.

Recently, a young mother Shehla gave birth to a girl, her first child, after remaining in severe labour pain for two days at Pakistan Institute of Medical Sciences (PIMS), Islamabad. When hospital staff called up the father to take the child's custody, he did not show up. Shehla's mother-in-law, who had brought clothes for the minor, albeit for a male child, also left crying. After a few hours, when the father finally showed up, a nurse asked for sweets. "Had the child been a boy, I would definitely have given you something, but what can I give for a girl? I am already aggrieved, do not torture me," he rudely said. Shehla's husband was not illiterate, but was working at a very good post. So much for patriarchy and male chauvinism!

There are various reasons, including social, cultural, economic and legal, that lead to such types of violence. Legally speaking, the laws of the land are not favourable for women. As Justice (r) Majida Rizvi, puts: "There is need to repeal all such laws that are discriminatory against women. Under Qisas and Diyat law, the women's status as head of the family to settle the money matters is not recognised. Similarly, despite being legally declared as murder, the Karo Kari law has yet to see its implementation in true sense." According to religious scholar Dr Abbas Hussain, "Depriving women of the good opportunities in life should also be considered as violence against them."

Despite the fact that a young mother dies every 20 minutes and about 30,000 women die every year due to preventable maternal causes, Pakistan still does not have a national maternal and newborn health policy. According to the latest figures released by the National Institute of Population Studies, the maternal mortality rate (MMR) in Pakistan is 500 per 100,000 women, which means that the country is only better off than India (MMR: 540) and Afghanistan (MMR: 600).

The government has initiated many programmes for reducing the MMR in the country, including National Programme for Family Planning, National Nutritional Programme, Maternal and Neonatal Health Cell, etc, but these efforts have so far failed to bring about any visible improvement in the condition of women. According to Dr Nabeela Ali, chief of party, Pakistan Initiative for Mothers and Newborns, "Pakistan is signatory to the Millennium Development Goals (MDGs) and had pledged in September 2000 to meet the MDG target of reducing maternal mortality by three-quarters between 1990 and 2015, but despite the lapse of eight years we still have the MMR of 500 per 100,000 live births. Going by the same pace, we will not be able to achieve the target of 140 per 100,000 live births by 2015 as was pledged in September 2000. Extraordinary measures are required to achieve this MDG target."

Dr Nabeela says there is a dire need to accord the highest priority to health facilities for mothers. "75 percent of the births take place at home in rural communities and the postpartum period is quite critical for both the mother and the newborn, yet neither health programmes nor mothers and families recognise this vulnerability. Similarly, the main reasons for still birth are improper diet and no check-ups during pregnancy," she informs. The MDGs 3 and 4 deal with the health of women and children. It is widely believed that if these goals are achieved, then the condition of the country's women will improve, but Dr Shershah Syed disagrees: "I think until we achieve the MDGs 1 and 2, which deal with poverty and illiteracy, there will be no change in the MDGs 3 and 4. Unfortunately, no commission has been formed so far to monitor the progress of MDGs in the country."

Dr Shershah further says: "The women have never been a priority for the government. They get funds in begging only; all the work done in the country to improve the heath status of women is undertaken with the money provided by donors. A little focus on primary health care facilities at rural health units (RHUs) and taluka hospitals can yield great results, because about 70 percent of the country's population visits these for treatment. However, only six percent of the health budget is allocated to RHUs and taluka hospitals, while 85 percent goes to hospitals in cities that cater to only 15 percent of the population. It is all because of vested interests working at the policy and planning levels who allocate huge amounts to purchase expensive equipment for hospitals in cities, while women die in rural areas due to unavailability of primary health care facilities."

Jamil Ahmed and Babar T Shaikh write in their research article, printed in the Journal of the College of Physicians and Surgeons Pakistan (2008), that Pakistan traditionally spends lowest on development in general and health and education in particular. A large sum of the budget is being spent on the curative care and hospital cost in a scenario where one third of the population in Pakistan lives below the poverty line ($1) and the health facilities remain widely inaccessible to the masses. Also, Pakistan has over 98 percent of the out-of-pocket health expenditure, when over 75 percent visit the private sector for health care.

National public expenditure on health is $4 per capita, while total expenditure on health is $18 per capita. This reflects the high share (75.6 percent) of private health care spending. Social health insurance covers only five percent of Pakistan's population, but represents about 40 percent of federal and provincial governments' spending on health. The country spends 80 percent of its meagre health budget on tertiary care services (used by only 15 percent of the population) and only 15 percent on primary health care services (used by 80 percent of the population).

The health budget has always been low and stagnant in Pakistan; it has remained below 0.6 percent during the past few fiscal years. Reliance of the country's health care system on foreign funding and a stagnant domestic health budget paint a gloomy picture. The budgetary allocations for health in Pakistan are still much less than the World Health Organisation's (WHO's) recommended five percent of the country's gross domestic product (GDP).

Internationally, Pakistan is ranked 175th out of 177 countries of the world when it comes to health of mothers and newborns. Even some of African countries are better off than Pakistan, which takes pride in being a nuclear power. About 67 percent of the country's 164 million population lives in rural areas. With the present growth rate of 1.9 percent, fertility rate of 4.1 births and contraceptive use rate of 30 percent, the health facilities of the country do not match with the needs of the population.

Pakistan has 906 public sector hospitals and 5,290 basic health units, while the population-bed ratio is 1536:1. In all, there are 122,798 doctors, 57,646 nurses, 25,000 midwives and 96,000 lady health workers. Contrary to the rest of the world, where the number of nurses and paramedical staff is more than that of the doctors, in Pakistan it is opposite. Moreover, the number of midwives and nurses remained almost static from 1993 to 2004. Currently, there are 25,000 midwives in Pakistan. However, most of them are based in cities despite the fact that 70-80 percent deliveries are done at home in villages.

These figures call for an urgent need to have more qualified nurses and trained midwives. Priority should also be given to the training and placement of midwives in those rural areas where there are no health facilities for women. Improvement in the existing health facilities in hospitals, availability of transport facility and behavioural change at the household level are some of the critical areas requiring urgent attention. As a United Nations' statement says, "The world must save women, so that women can save the world." It is the collective responsibility of the society to make concerted efforts for decreasing MMR, because this will ultimately reduce violence against women.

During a visit to the site of Sialkot Express mishap in Gujjar Khan on November 10, the federal minister for Railways directed senior officials to ensure that no more derailment occurs. Given the ground realities, the minister's decree is no more than a pious hope. During the recent past, the Pakistan Railways has been severely criticised for the high frequency of serious accidents.

In 2005, three trains collided near Sarhad Railway Station in the vicinity of Ghotki with fatalities mounting to several hundred. On January 29, 2006, six rail coaches of the Rawalpindi-bound Lahore Express fell into a ravine near Jhelum killing four passengers and injuring dozens of others. The Karakoram Express derailed between Samasatta and Kalanchwala railway stations on February 4. Ten coaches fell off the track killing one woman and injuring many others. In the same week, goods trains collided near Hyderabad destroying goods and railway hardware worth millions of rupees. As usual, for all the abovementioned accidents, orders of inquiries were issued.

It is obvious that the Pakistan Railways has reached a near moribund status. For those who spent their entire lives serving this important national department with honesty, professionalism and diligence, it makes a most painful reality to accept. The North Western Railways, which became the Pakistan Western Railways after the partition, was a profitable enterprise. Spread over 7,600 kilometres, the network effectively connected the major cities, towns and regions of what was then termed West Pakistan. The department was managed, organised and controlled largely along professional lines, because most of the senior officers and engineers had obtained training and experience under the British administration.

Passengers and goods / freight movement are two essential ingredients of the services delivered by the Pakistan Railways. As per norm, the passenger service is subsidised by the surplus revenue earned through goods / freight transportation. Therefore, the Pakistan Railways has to operate a sizable number of goods trains to maintain financial balance. More than 40 goods trains (20 up and 20 down) used to operate from Karachi to various destinations between the 1960s and 1980s. In other words, the Pakistan Railways was playing a key role in the transportation of various kinds of raw materials and finished goods, thus bolstering economic activities across the country.

Towards the late 1960s, the government shifted the emphasis to road transportation. This approach acquired greater intensity during the Zia regime. The National Logistics Cell (NLC) obtained a sizable market share in the transportation of goods in a swift manner, thus depriving the Pakistan Railways of its important source of revenue. Subsequently, the budget deficit began to rise. According to a former employee of the Pakistan Railways, the number of goods / freight trains has decreased by half since the 1960s.

For medium and long distances, the transportation of goods by railways is at least 10 times cheaper than by roads. Another advantage is that lesser diesel is consumed in the former than the latter, leading to lesser requirements for fuel imports. Transportation insurance, safety records and handling of goods are a few other factors that make railways a logical choice. However, this logic has been brushed aside and the government continues to employ the NLC and other road options for transportation of goods.

According to a safe estimate, Pakistan has spent an additional $1 billion during the last two decades for choosing the road option over that of railways. The frequent wear and tear of roads, dubious award of road transportation contracts, high cost of maintenance of road infrastructure and limited security of cargo are some of the outcomes of this approach. Due to under utilisation of its infrastructure and other reasons, the Pakistan Railways is currently burdened with a deficit of more than Rs7 billion.

In this scenario, the Pakistan Railways needs an overhaul, but in a rational manner. There are many issues, some of which are too prominent to be ignored. Engine drivers receive a meager salary in comparison to the enormous responsibility that they are made to shoulder. In the past, drivers were paid even more than the gazetted officers to ensure quality services. By provision of other facilities, such as housing, education for children, social welfare, health care and post-retirement benefits, the employees in general and drivers in particular were made to concentrate on their jobs.

With the passage of time, these facilities have disappeared with a direct repercussion on the level of service. Railway bridges are in need of thorough assessment and consequent repairs. Tracks need a continuous monitoring system, especially devices that can help in forewarning about any act of sabotage. Moreover, the existing tracks are overburdened and need massive repairs. The Pakistan Railways lands, reserved for operational needs of the system at various locations, must also be protected.

In the modern times, when land assets are already diminishing, the sale of lands shall be tantamount to curtailing the scale of Pakistan Railways in the future. This matter needs a public debate. For providing technical advice and monitoring, a supervising committee of competent technocrats and administrators may be formed to periodically review the performance of the department. The Pakistan railways also possesses a carriage factory and a locomotive manufacturing facility, both of which require stocktaking and proper upgrading. It is shameful to note that only Lahore-Khanewal sector has the facility of electricity-powered locomotives. A nuclear power must at least run trains with an efficient traction mode!