The Public/Private Sector Divide

➢The military government made the decision that the private sector was to play the
leading role in the industrial sector.
➢Neither was it possible to abandon the industrial sector investment program
because a large proportion of the funds had been either spent or committed in the
form of international contracts.
➢To restore the confidence of the private sector, the agricultural processing
industries taken over in 1976 were denationalized.
➢As for public sector industries, a program for improving efficiency and
profitability was initiated, and the investment program was restricted to ongoing
projects and to the balancing, modernization, and replacement (BMR) of existing
public sector.
➢There were no clear moves privatization: In fact, public sector industry was
playing an instrumental role in industrialization and development.
➢The political economy of the government's decision not to go on a large scale
privatization drive was that it did not want to alienate those groups and classes
which had benefitted from nationalization by seeking employment in the sector.
➢In the Fifth Five Year Plan ( 1978—83) only 23 per cent of total public industrial
outlay was on new projects. In the early years of the Zia government, public sector
output increased much more rapidly than private sector large-scale manufacturing
output, but in the second half of the ten years, the growth of the private sector
was faster.