Six new national schemes worth Rs. 20 billion set to cover half million Pakistanis.
In his second address to the nation since becoming prime minister, Nawaz Sharif ostensibly targeted Pakistan’s youth—a key electoral and economic demographic—but his underlying message was just as clear: the government’s new welfare schemes can only be broadened and made sustainable once loss-making state-owned companies are privatized.
“Today, we are beginning a journey for the fulfillment of promises,” said Sharif in his short, televised address Saturday evening. “With the passage of time, these steps will not only be enhanced but we will also allocate more and more resources to them.”
Sharif then laid the groundwork for his government’s privatization plans. “Billions of rupees spent on government institutions functioning in deficit can be saved each year,” he said. “This amount can be utilized on schemes for the welfare of the common man, on education, on youth training, and on creating new opportunities for youngsters.” He said some Rs. 500 billion was being spent annually to prop up loss-making public sector companies. “These billions, if available to the government, can be utilized on such financial initiatives that can bring about a revolution in the lives of the underprivileged and youngsters.”
Sharif said the public sector had been irreversibly weakened because of “overstaffing due to rampant nepotism.” He cited Pakistan International Airlines, Pakistan Steel Mills, and Pakistan Railways as examples of state companies “fallen into rubble” because of “favoritism and financial mismanagement.” The private sector, he stressed, must be strengthened “in the interest of the nation” and in order to provide people with “opportunities of self-reliance.”
During the election campaign, Sharif had promised to swiftly privatize cash-bleeding state-owned enterprises like PIA. Since taking office in June, his government has said it is working on plans to privatize several public sector companies, including highly profitable ones like Sui Northern Gas Pipelines Limited and Sui Southern Gas Company Limited.
Despite wanting to, the previous government led by the Pakistan Peoples Party could not privatize state companies largely because of the Supreme Court, which stopped the sale of Pakistan Steel Mills in 2006. The court’s landmark action, popularly hailed at the time, is now viewed by most as shortsighted and economically damaging. (Pak-American Fertilizer Limited is the only company to have been privatized, also in 2006, following the court judgment.) Now on opposition benches, the PPP, fearing “crony capitalism,” says it will vehemently oppose Sharif’s privatization program.
The six new programs Sharif unveiled have a combined annual budget of at least Rs. 18.5 billion and will cover up to 484,444 people in the four provinces, the federally-administered tribal areas, Pakistan-administered Kashmir, and Gilgit-Baltistan. These are:
Interest-free Loans: Sharif’s government intends to provide “micro” interest-free loans to some 250,000 people. The “micro” in the program’s name suggests that the government may deploy some of the same vetting and repayment-guarantee processes successfully used by microfinance institutions. Initial budget: Rs. 3.5 billion.
Kick-starting Small Businesses: Loans ranging from Rs. 500,000 to Rs. 2 million and with an interest rate of 8 percent will be disbursed to small businesses and startups, initially through two government banks: the National Bank of Pakistan and First Women Bank. Half of these loans will be provided to women. Initial budget: Rs. 5 billion.
Temp Jobs: “Educated youngsters” with at least 16 years of schooling from “recognized institutions” will be provided six months of on-the-job training and a monthly stipend of Rs. 10,000. These temp jobs can be parlayed into opportunities at home or abroad. The scheme will cover 50,000 high-school graduates. Initial budget: Rs. 4 billion.
Vocational Training: Anyone under the age of 25 who has been schooled up to at least Grade 8 and is unemployed can qualify for the federal government’s six-month Youth Skill Development Scheme. The program will also provide Rs. 3,000 to Rs. 5,000 to each trainee during this period. Initial budget: Rs. 0.8 billion.
Postgraduate Scholarships: The government will pick up the tab for the postgraduate or higher education of men and women from “underprivileged” or “far-flung” parts of the country. Aimed at increasing the number of master’s degree recipients, the program hopes to cover 30,000 students from Pakistan’s smaller cities and towns. Initial budget: Rs. 1.2 billion.
Laptops: Emphasizing the importance of Information Technology, Sharif announced that his party’s popular laptops-giveaway program is being taken national. The Prime Minister’s Scheme for Provision of Laptops will provide computers to 100,000 students on the basis of their academic performance. Initial budget: Rs. 4 billion.
Sharif said the federal cabinet has approved the six new programs and that arrangements for their implementation have been readied. “However,” he added, “to make the schemes completely transparent and merit-based, we would like to receive your suggestions and recommendations.” Sharif said citizens can weigh in on the programs by visiting the government’s new website, by texting 80028, or by writing to the Prime Minister’s Office. The public has 10 days starting Monday to provide inputs.
In closing, the prime minister reiterated that the initial allocation of Rs. 20 billion was a meager one, but all that the country could afford at present. He reemphasized that loss-making public sector companies cost Pakistan Rs. 500 billion annually.
“A time will come when taxpayer money will be spent in a more constructive manner,” said Sharif, alluding to his government’s privatization plans. “We have decided to allocate more money on your welfare and development in the coming years,” he added. “Get ready to benefit from these programs … Stand up with the aim to rewrite your destiny!”
Sharif left for New York on Sunday to attend the U.N. General Assembly, where he is scheduled to speak on Sept. 27.