Long-run Performance of Public vs. Private Sector Initial Public Offerings in Pakistan

The private sector had its major share in the economic development of the country in the early years of its independence in the 1950s. However, the private sector suffered a set back in the early 1970s, when a huge process of nationalisation of a large number of private industrial units was undertaken by the then government. Over the decades these enterprises were not professionally managed and the political influences in the management and running of these enterprises played havoc with them and consequently the experiment proved to be a failure. Attending to the weaknesses and inefficiencies inherent in the public sector enterprises, privatisation was systematically initiated by the then government in the early 1990s. Various privatisation commissions were set up in subsequent years and the privatisation process got some momentum during the present government and many large and profitable firms were privatised in the last few years, particularly at a time when the overall climate in the country was responsive and conducive for investment. The government, however, privatised many enterprises through public offerings on individual-case basis.