German philosopher Karl Marx states in 'Critique of the Gotha programme' (1875) that 'labour is not the source of all wealth. Nature is just as much the source of use values as labour.' After industrialisation, the colonial powers needed manpower to run their profit-driven exploitative economic system, for which they relied upon slavery. But after its abolition under the Slave Trade Act of 1807, the UK resorted to the indenture system whereby not only locals but also their lands and natural resources were exploited.
World War I had destroyed the global economic order (the Pax Britannica), exposing colonialism and causing the Great Depression. Then US President Franklin D. Roosevelt introduced several state-regulated initiatives benefiting people under his New Deal. World War II saw the British Prime Minister Winston Churchill's defeat in the 1945 General Elections - who was campaigning over his war successes - by Labour Party's Clement Richard Attlee who proposed socialist programmes for reconstructing the war-ravaged country.
Fast forward half a century, and the former colonial masters had failed to learn from the past and celebrated the fall of the Berlin Wall as a victory of the market system in the Cold War. In the 1980s, British Prime Minister Margaret Thatcher and US President Ronald Regan initiated neoliberalism's first wave. However, Roosevelt's Glass-Steagall Act of 1933 - regulating banking practices responsible for the Great Depression, and separating commercial and investment banking while creating the Federal Deposit Insurance Corporation - was repealed by the US President Bill Clinton in 1999, contributing to the 2008 financial crisis, the largest economic recession since the Great Depression.
Henry Kissinger's 'Does America Need a Foreign Policy? Toward a Diplomacy for the 21st Century' (2002), praised the American economic model and the push for globalisation. But he also predicted the 2008 financial crisis, leading to bailouts using taxpayers' money and state intervention in a 'free market' under US President George W. Bush's Emergency Economic Stabilisation Act of 2008. This exposed the flawed market system's fragility and hypocrisy.
Thatcher had led a fire-sale, privatising British Aerospace, British Telecom, Jaguar, British Airways, British Steel etc. The underlying idealogy was that tax cuts for the rich and promising competition would breed efficiency and lower prices in critical services for the public. However, after privatising British Gas under the Gas Act 1986, and introducing 'Popular Capitalism,' prices rose and in 2022. Citizens protested increases in energy and gas prices by burning their bills. The promise that competition would lead to increased efficiency and lower prices never materialised, as monopolisation by giants never allowed new companies to enter the so-called competitive market. People are now trying to save the National Health Service, still consumed by Thatcherism and neoliberalism.
Zulfikar Ali Bhutto nationalised major industries, under the Nationalisation and Economic Reforms Order, to break the undue concentration of economic power, but faced criticism for derailing Pakistan's economic development
The incumbent Labour government plans to create a new organisation, 'GB Energy' which is similar to the 'Green Investment Bank' of the past. Besides investing in renewable energy projects, it plans to coordinate and build them. Rather than nationalising energy companies, or simply being a government investment fund, it is something in the middle, as the Great British Energy Bill, 2024, if passed, will be given 8.3 billion pounds in funding over the next five years. This money will be used to invest in and manage clean energy projects, and has already announced a project leasing the Royal family's land to build new wind farms on the seabed, which will hopefully power 20 million homes. This Public-Private partnership is expected to shave around 300 pounds off the average household's energy bills, and accelerate the shift to Net Zero, meeting the Labour's 2030 target.
Pakistan has a long history with nationalisation and privatisation.
In 1972, Pakistan's President Zulfikar Ali Bhutto nationalised major industries, under the Nationalisation and Economic Reforms Order, to break the undue concentration of economic power, but faced criticism for derailing Pakistan's economic development. The nationalisation of Ittefaq Foundry gave political rise to the Sharif family under General Muhammad Ziaul Haq's regime.
After toppling Prime Minister Nawaz Sharif's government, General Pervez Musharraf's regime oversaw massive privatisation, including Karachi Electric Supply Corporation (KESC) and the Pakistan Telecommunication Company Limited (PTCL). Chief Justice of Pakistan Iftikhar Muhammad Chaudhry suspended Pakistan Steel Mills' privatisation. He also declared the Reko Diq gold and copper mining deal void in 2013, when Balochistan's Rubina Shah Noahtani of the Syed Balanoshi Noahtani Sadaat tribe, complained about Musharraf's unilateral agreements with foreign companies to destroy Balochistan's resources and harming its environment and wildlife for 20 years by using cyanide gas.
The Supreme Court of Pakistan (SCP) validated settlement agreements with foreign companies and revived the Reko Diq mining project after the International Centre for Settlement of Investment Disputes penalised Pakistan to the tune of $5.976 billion. The SCP also directed the employment of locals and implementing labour laws, which is unlikely as under Section 21 of the Specific Relief Act 1877, private companies can easily terminate employees, because it prohibits specifically enforcing contracts involving personal service against unwilling masters.
In 2021, Chief Justice Gulzar Ahmed observed that the SCP cannot regularise the services of employees and legalised the exploitation of employees by private companies.
Indian Prime Minister Narendra Modi said that 'blood and water cannot flow together,' and started killing the Ravi River. Pakistan responded by setting up RUDA
The verdict also increased Balochistan's Reko Diq share from 25% to 35%, but the decision lacked legitimacy because it did not carry consent from locals. Balochistan was excluded from the decision-making process regarding the China-Pakistan Economic Corridor (CPEC) as no legislation for it was ever passed, except for the China-Pakistan Economic Corridor Authority Act, which was announced to be scrapped in 2022.
In 2023, the Sindh High Court (SHC) prohibited the excavation and mining on Karoonjhar hills, emphasising its significance in religion, culture, heritage, wildlife, and nature. However, according to environmentalist and journalist Zuhaib Ahmed Pirzada, illegal mining by private companies continues for granite, marble, etc, despite the court ban.
In 2023, Gilgit-Baltistan saw protests erupt against land acquisition for CPEC and other projects, while 52,700 acres of land in Sindh and 45,267 acres of land in Punjab were given away for corporate farming. Recently, the Peshawar High Court showed concern over the use of agricultural land for housing schemes, and directed the provincial government to resolve within six months the issue of establishing the industrial estate in Swabi by the Small Industrial Development Board (SIDB) and housing schemes on agricultural land in Charsadda.
After the 2016 Uri attacks, Indian Prime Minister Narendra Modi said that 'blood and water cannot flow together,' and started killing the Ravi River. Pakistan responded by making the Ravi Urban Development Authority (RUDA). Human Rights Watch reported on April 11, 2023, that farmers were forcibly evicted for this project, and that Pakistan needs to reform its colonial-era laws to protect land rights and environment.
In the Qazalbash Waqf case (PLD 1990 SC 99), the SCP's Shariat Appellate Bench declared land reforms un-Islamic, allowing elites to grow their wealth without limits. This verdict led to the privatisation of public spaces. Muneer Hussain Lanjwani, a resident of the Darri village in Kot Diji, Khairpur District, Sindh, recalled that previously, there were village lands on which local villagers and nomads would sit and utilise freely. These lands now belong to influential individuals belonging to or affiliated with a political party, who were depriving locals of a common space and harming wildlife, especially birds.
In 2024, Pakistan Peoples Party Chairman Bilawal Bhutto Zardari opposed privatising Pakistan International Airlines (PIA). The government, however, justified the move by citing the organisation's excessive losses, ineffectiveness, and corruption—even though corrupt officials could be held accountable by strengthening accountability process. On the other hand, industrial giants fearlessly commit financial crimes and disobey the government's directives.
It was held that a petition against the KESC was not maintainable as it commands the majority of the shareholdings to the extent of 73% and is not performing any government-related functions as a legal entity, rendering protests and burning bills pointless
Privatisation of assets like the KESC, which then became K-Electric, was futile as people still suffer from power outages, and now there are allegations of financial crimes and money laundering on its owner, who was also charged with transferring charity money to a political party. Recently, K-Electric's overbilling scam was unearthed, and earlier during the Covid-19 lockdown, the power utility disobeyed Sindh government's directives to waive a month's bills for citizens and charge the dues as installments over the next ten months. Recently, the National Electric Power Regulatory Authority (NEPRA) has confirmed electricity over-billing by all power distributing companies (DISCOs), including K-Electric, in the months of April and June of 2024, and sought an explanation from the companies on the matter.
In the Erum Heights Residents Welfare Association v. KESC case (2001 CLC 321); and Naimatullah Khan Advocate v. Federation of Pakistan case (2020 SCMR 622), continuous supply of electricity, water and other utilities were declared a fundamental right and ad infinitum. The status of citizens, however, was reduced to that of consumers after KESC's privatisation. But, for now, the High Court is admitting constitutional petitions against it. In Muhammad Yousuf v. Chairman KESC case (2009 YLR 1038), it was held that a petition against the KESC was not maintainable as it commands the majority of the shareholdings to the extent of 73% and is not performing any government-related functions as a legal entity, rendering protests and burning bills pointless.
The SCP refused to interfere in the country's economic policies while adjudicating Jamaat-i-Islami's (JI) petition challenging the KESC's privatisation. The JI had contended that the privatisation process was carried out in a wrongful manner, the utility was sold at an unfair discount, while there were alleged procedural irregularities in the bidding process, thus rendering the process opaque.
In July 2024, Pakistani businessman Shehryar Chishti claimed to have acquired K-Electric in the Pakistan Stock Exchange, while in June 2024, Pakistani-American businessman Ali Sheikhani claimed on Instagram that he wished to buy K-Electric. These claims and past transactions show that buying Pakistan's public assets is a joke because anyone can buy them, provided they can fork out sufficient cash. But who can argue against this principle when even the moon can be privatised? Presently, the government has decided to review and terminate agreements with 15 Independent Power Producers (IPPs) to provide relief to the public burdened by high electricity cost - on account of unproductive capacity charges.
JI's national resistance movement to fight for public rights, protesting against high electricity bills and extended load-shedding, saw protests erupt in Lahore, Gujrat, and Karachi, while the Muttahida Qaumi Movement-Pakistan (MQM-P) organised a province-wide demonstration. People are protesting and burning bills, but the government cannot reduce energy prices without permission from the International Monetary Fund (IMF). In Azad Jammu and Kashmir (AJK), the government accepted demands to cut wheat and electricity prices after days of violent unrest.
In 2020, farmers in India protested against three laws by Narendra Modi's government which removed protections accorded to them from the free market, but in Pakistan, the government decided to purchase wheat from the private sector, depriving farmers of any kind of state protection. These farmers protested the government's decision not to buy their wheat, causing them financial losses, while a leaked internal report from Sindh Food Department stated that from 2022 to 2024, around 4,000 tonnes of wheat was stolen in connivance with officials of the department.
Indian Prime Minister Indira Gandhi's decision to nationalise several commercial banks made them a burden on the state and promoted red-tapeism. But neither the Modi government reverse it, nor did it derail India's economic growth. In Pakistan, however, Musharraf's massive privatisation drive failed to produce the promised results, while Bhutto's nationalisation is still unfairly criticised. After privatising Pakistan's natural and national assets, the government is now privatising PIA, for which it needs to ask itself, will it all be worth it.