Distributional Impact of Public Enterprise Labour Policies in Pakistan

Zareen Fatima Naqvi


Employment generation has been one of the goals of creating or
maintaining government -owned enterprises in the past. In fulfilling
this role public enterprises often played the role of the model employer
see Lakshman (1984). In the current policy atmosphere both domestically
and internationally, there is a trend to limit the size of government
intervention in the economy. In Pakistan the privatisation of industrial
units and the planned divestiture of infrastructural units like Water
and Power Development Authority (W APDA), Karachi Electric Supply
Corporation (KESe) and Pakistan Telecommunication Corporation (PTe) is
changing the mix of public-private domain in economic activity. What
would be the impact of labour retrenchment in the former public
enterprises? Estimates show that there has been a 42 percent reduction
in employment in the recently privatised units [Naqvi (1994»). If the
government reduces the public sector workforce and cuts back the liberal
remuneration package to public employees, which groups would benefit
from such a move? These questions have been analysed in the context of a
computable general equilibrium (CGE) model. Section 2 describes the
model. This is followed by a brief discussion of the data. Model
simulation results are discussed in Section 4 and the conclusions are
presented in Section 5. The Appendix contains the equations referred to
in the text.

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DOI: https://doi.org/10.30541/v33i4IIpp.1399-1414


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