Published on: Mar 3, 2016
Transcripts - Nationalization
Nationalization is the term used when the government takes the control of anything that was
ownned private previously. Nationalization was the policy that was implemented by Zulfiqar Ali
Bhutto. Bhutto according to his promise restored the economic order that was badly shaken by
the war, attracted towards it.
In the Ayub regime wealth was concentrated in few hands that led to a visible class difference in
the society. It created hatred for the upper class among the masses Bhutto tried to overcome the
situation by Nationalization.
The party had programed in their manifesto to nationalize the industries gradually. After two
months of Bhutto’s resuming office, under the Economic Reforms order that was passed in
January 1972, the government took over 32 industries from the private sector. The industries
were put under to basic categories 1) Iron and steel industries 2) Basic Metal industries 3) Heavy
Engineering industries 4) Heavy Electrical Industries 5) Assembly and Manufacture of Motor
vehicles 6) Tractor Plant Assembly and Manufactures 7) Heavy and Basic chemicals 8) Petrol
chemical industries 9) Cement industries 10) Electricity, gas and oil refining.
It was first step towards the policy of nationalization in September 1973, 26 vegetable ghee units
Banks were also nationalized in 1974. They were in placed the hands of government on the
financing of Banks.
In 1976 the 300 small units of cotton ginning, rice husking, flour milling were also taken in
control. The exports and imports were also taken under the control of government through
trading corporation. They wanted to ensure the distribution of wealth and the prosperity of lay
man. However the policy of nationalization started by Bhutto had many defects. It caused a great
damage to the private sector. Investment in the private sector was almost finished. After the
military coup in 1988 Chief Marshal Law administrator denationalized the industries.
The relatively harmonious relationship between the public and private sector was given a blow
by a series of nationalizations of industrial units which began in 1973 and culminated in the take-
over of rice husking mills in 1976: these nationalizations were the ad hoc responses towards
various circumstances. In August 1973, floods of intensive magnitude swept across the extent of
the country, the first natural calamity of this nature to have inundated the country. The
immediate result was in the shape of skyrocketing price hikes in consumer goods. For instance,
the price of cooking oil increased threefold.15 As if it was not enough, cotton crop continued to
be affected by pests and floods.16 The government’s back out from the promise that it would not
nationalize small industrial units, caused panic and consequently private investment fell
considerably. Moreover, this measure encroached upon the public confidence. Bhutto
government’s arbitrary and unexpected move in July 1976, to nationalize the floor mills, cotton
ginning and rice husking mills was the most unpopular measure for which the PPP had to bear
serious political costs. The small industrialists, traders and shopkeepers were outraged by these
measures which threatened their livelihood. These were the people who played active part as
opposition movement in paralyzing economic activity during national strikes: thus ensuring the
efficacy of protests and eventual downfall of the PPP government.