Professional Documents
Culture Documents
Articulate (Vol 22) April 2022
Articulate (Vol 22) April 2022
April 2022
(Volume - 22)
EMBRACING GLOCALISATION
IN the face of the Covid 19 uncertainties and economic challenges compounded by the Ukraine crisis, the conventional
wisdom continues to clasp with national priorities that are shaping against globalism with international firms becoming locally
territorialized with multidimensional domino effects. These global challenges are the biggest stress test that international
development cooperation and regional integration initiatives have ever faced. In the midst of all this, governments are
exploring solutions to avoid long-term damage to the economy and facilitate the recovery that can address challenges to
livelihoods, poverty alleviation, provision of global public goods, employment creation and maintain the global order. While
COVID-19 did not trigger technological, and political competition between countries, the ongoing Russia-Ukraine crisis has
compounded the challenge of economic recovery and has triggered a sharp surge in inflation as well as political division across
the world resulting into brewing energy and food crises. Before all this, Globalization has been the defining feature of the
unipolar world after the demise of the Soviet Union. The global economic structure evolved on its basis for the last three to
four decades.But soon the challenges of the 21st Century initiated the debate of modified economic and political structure
with more opportunities in the surrounding environment. The less competitive systems which could benefit from
globalization have more chances to perform better in their local environment. In this fractioned environment, global
businesses and investment will be impacted increasingly by oppositional politics, polarization and different ways of doing
things across different poles. Tackling these global challenges requires pragmatic policy approaches away from conventional
ideas about governance, organizations, leadership and innovation including the concept of glocalization developed by Roland
Robertson and George Ritzer strengthened through technological changes and innovation.
Glocalization is a combination of the words “globalization” and “localization” and can be used to describe a product or service
that is developed and distributed globally but is also adjusted to accommodate the user or consumer in a local market. Through
Glocalization, localities develop direct economic and cultural relationships to the global system through information
technologies making the world a more connected and interdependent place. Glocalization promotes regional trade for
harnessing the potential for economic gains by expanding business, investment, and other initiatives across borders while
leveraging local endowments. Thus, while the conflicts and challenges are moving the world towards a new era of a fully
multipolar world with the statements like” You are with us or against us” echoing again, China on its part maintains that a
normal trade relationship with Russia is not aiding Russia’s war efforts, just as Beijing’s maintaining a normal trade relationship
with Ukraine is not sabotaging Ukraine’s war efforts. Therefore, the world must learn to adapt to the needs of the other,
explore new relationship models promoting democracy in internal relations, and establish a favourable environment for mutual
growth and shared prosperity. The way China has approached the conflict and has encouraged regional peace and prosperity
through negotiations, it is believed that role of China will be pivotal and peripheral position to resolve the issue. However,
whatever the outcome of the conflict, the world economic and development approach will change and will have long-term
consequences. The crises may on the other hand increase China’s reliance on BRI and its projects like the China-Pakistan
Economic Corridor (CPEC), it also gives partner countries like Pakistan the opportunity to leverage the initiative and
immediately work on addressing key infrastructural and connectivity bottlenecks for seamless trade. The road and rail
networks towards China and Afghanistan including CAREC initiatives need to be developed fast. However, despite the
nature and duration of a war the outcome always brings new challenges and approaches for others to learn and improve from.
Viewing the global economic and political trends, the enterprises and investment-related government agencies will be required
to take a broader and long-term view for showcasing a glocalized approach to attract investment through a refined approach
for achieving strategic fit by showcasing local natural endowments and leveraging regional and global connectivity. Global
enterprises need to take several steps to mitigate the effects of the crisis.Learning from China’s economy, an intertwined
regional and global approach is imperative. Countries need to craft regulations properly tailored to ensure that competition
and regional integration are addressed. Tax incentives can be geared to help workers more and global talent to work for govt
and private enterprises locally. The government may attract investment in science and technology, education and vocational
Graham Allison: In short, yes. The book-length version—Destined for War, which was published just as Trump became
president—forecasts that things will get worse, before they get worse. I’m often asked by folks in Washington, “Well, you
know, that was five years ago. What would Thucydides say now?” And I answer that if Thucydides were watching, he would
say: Both antagonists are right on script, almost as if they were competing to see which could better exemplify the
characteristics of the rising power on the one hand, and the ruling power on the other. And that he’s sitting on the edge of his
seat as they accelerate toward what could be the grandest collision of all times.
Mecklin: Given that happy view, what should the United States do to change its approach? I would understand if somebody
had that sort of dark view with Donald Trump in the White House, saying all sorts of horrible things about China. What
should Joe Biden be doing differently?
Allison: I am generally supportive of the president, whom I’ve known since the 1980s, and the team that he’s got wrestling
with this, including [National Security Adviser] Jake Sullivan and [National Security Council coordinator for Indo-Pacific
Affairs] Kurt Campbell, and [Secretary of State] Tony [Blinken], etc. But I think the objective conditions that Thucydides trap
captures, and Thucydides described in his brilliant analysis of the rivalry between Athens and Sparta, create a dynamic that is
extremely difficult to manage successfully. Indeed, as I’ve written elsewhere, I believe President Biden faces the most complex
and extreme challenge any American president has had to try to cope with. In China, one confronts not only a meteoric rising
power on all dimensions that has in a single generation become a full-scale peer competitor. We also confront a nation that has
become the second backbone with the United States of the global economy—an indispensable economic partner of Germany,
Japan, the UK, and most other major economies in the world. Unlike the Cold War rivalry with the Soviet Union, where the
Soviet Union essentially isolated itself from the global economy and traded only with the countries in its sphere, China has
developed an economy that’s now as large as ours—indeed, by the yardstick CIA believes is the best metric for comparing
national economies, an economy larger than ours. Hard to believe, yes; but go to the CIA website and look at their Factbook.
China is the manufacturing workshop of the world. China is the most essential link in most critical global supply chains. So let
me step back, if I can. In trying to address this issue, one initially has to work on the diagnosis of the problem, to make sure
that you have all the dimensions. In strategy, diagnosis precedes prescription [of a solution]. So the proper diagnosis, I believe,
is to recognize this as a classic Thucydidean rivalry, in which a genuine, rapidly rising power is in fact, threatening a colossal
ruling power.
As Thucydides explains, the Thucydidean dynamic is driven by three factors: material reality, psychology, and politics. At the
material level, China really is rising and encroaching on positions and prerogatives Americans have come to believe are
naturally ours. In the book I suggest we visualize this as a seesaw of power—with the United States on one end and China on
the other. As China has bulked up, it is lifting our feet off the ground. Many Americans see this as an assault on who we
are—since for us, USA means number one. Others are still “China deniers”—refusing to acknowledge that China could be
number one in any race that matters. Psychology combines perceptions and misperceptions with emotions and identity—often
producing what Thucydides called “fear” in the ruling power and “arrogance” in the rising power. The rising power thinks,
“Well, wait a minute; I’m just asking for my due. The current arrangements of the so-called order were put in place before I
arrived. I now have grown, and I deserve more say—and more sway. That’s only reasonable.” And the ruling power’s
perceptions and psychology begin with, “What the hell is going on here? Who does he think he is? What does he think he’s
doing? Why is he not appreciative of the international order that we provided within which he was allowed to grow up?” And
then there’s a third layer of politics. Within the struggle for leadership within each government, a fundamental axiom declares:
Never allow a significant political competitor to get to your right on a matter of national security. If he were looking for a
poster child to illustrate this point, Thucydides could not find a better example than Washington today. I have no doubt that
some members of the Biden team get it. Certainly, Biden, Sullivan, and Kurt do. They appreciate that this is the best diagnosis
of the challenge we face. But if that’s the challenge, what about the response? I’ll confess that in Destined for War, I punt. The
concluding chapters draw a dozen lessons from the earlier rivalries for escaping Thucydides’s trap. And the final chapter
outlines four potential strategies that cover the spectrum from accommodation, on the one hand, to seeking to undermine the
Chinese regime, on the other. But end with a rousing call for a surge of strategic imagination, as impressive as what occurred
in the period between 1946 with the ‘Long Telegram” [on containment of the Soviet Union, written by George Kennan] and
1950 and NSC 68 and ultimately the framework for a Cold War strategy. I’ve been working on this problem, and I still am
short of an appropriate answer. But I’ll offer my current best idea: Because China is so much more complex a challenge than
the Soviet Union, the fundamental problem is that we have to pass what F. Scott Fitzgerald of The Great Gatsby called the test
of a first-class mind. Namely, we have to be able to hold two contradictory ideas in our head at the same time, and still
Mecklin: You’ve explained the setup to the situation very well. The United States seems to be in the process of constructing
some kind of containment of China, something, with this pivot to Asia idea, involving new alliances and the moving of forces.
I’m not sure that that exactly matches up to what you just described. Is a military surrounding, a containment strategy,
workable, given the complex situation you just described?
Allison: That’s a good question and one that I’ve struggled with, too, so let me step back just one step, and then I’ll answer
directly—since I think the answer is no. Given the complexity of the competing imperatives that we just discussed, it’s not
surprising that in trying to develop a playbook, people go back to historical analogs. The Cold War is becoming increasingly
the preferred analog, even though most of the people talking about it don’t know what the Cold War was. They vaguely
remember that somehow we won, so let’s do that again. It’s like the challenge you and the magazine have in trying to remind
people that nuclear weapons didn’t disappear, either. In short, we live in the United States of Amnesia. When people think
about historical analogies, the Applied History Project here at Harvard recommends they follow the advice of Ernest May, one
of the most distinguished international historians of the 20th century. According to what we call the “May Method,” when
you think of an analogy, like the Cold War, put it at the top of the page. Draw a vertical line down the middle of the page and
put “similar” at the top of one column and “different” at the top of the other column. If after reflection you can’t list three
bullet points under each, take an aspirin and call a historian. When I analyze the differences between the current situation and
the Cold War with the Soviet Union, the differences outweigh the similarities. The first big difference is that China has an
economy as big as ours, while the Soviet Union’s GDP never reached half that of ours. Secondly, China has established itself as
the indispensable partner of most major economies including Germany, Japan, the UK, and 130 other nations. If we tried to
build some new economic Iron Curtain, which side will we find them on? Germany’s major industry is automobiles and
China is their No. 1 market. So as they and others keep telling American officials: Don’t try to get us to choose between our
Mecklin: You’ve been talking about a rising power and a formerly dominant power, that relationship. But there’s a third
power in here, Russia, that may not be playing economically, but certainly has the nuclear weapons and the guile to play some
sort of role here, as it’s playing with Ukraine right now. How do you manage this really complicated, difficult US-China
relationship when there’s a spoiler like Russia jumping up and down and saying, “No, look at me.”
Allison: Again, a great question. And in thinking about it, one’s reminded why it’s so much easier to offer advice from the
sidelines than to be in the arena. First, start with the historical canvas: We’ve seen many instances previously, in which there
were not just the primary antagonists in a rivalry between a rising and a ruling country, but a third party as well. In the run up
to World War I, it was not just Germany rising, threatening Britain’s predominance. Germany was also looking over its
shoulder at Russia, which appeared to be getting its act together, building up its army and completing railroad lines for
bringing troops to the German border to present a serious threat. Second, as a result of the failures of American policy in
dealing with post-Cold War Russia, on the one hand, and the brilliance of Xi’s diplomacy, on the other, we have essentially
created what [Carter administration national security adviser] Zbig Brzezinski called the “alliance of the aggrieved.” Two
countries that should objectively find themselves at odds because of territorial disputes and history have quickly become
thickly aligned. Third, while most of the Washington policy community is trying to hold onto the mantra from the decade
after the Cold War that declares “Russia doesn’t matter anymore,” the brute fact is that Putin’s Russia today is no longer the
failing state many unilateralists remember. Putin’s Russia has a military that can fight and win to achieve political objectives.
The Russians demonstrated this in brutally destroying Chechnya—which is now pacified under Russian rule. They
demonstrated this in their attack on Georgia, which spiked its efforts to join NATO, and again in 2014 in seizing Crimea from
Ukraine. In Syria, while Obama was declaring: “Assad must go,” Putin said “nyet.” And Russians smile when they remind
American interlocutors that Obama is now gone, and Assad still rules Syria. If what one reads in the press and journals is an
actual expression of what people really think, I’d say most of the Washington foreign policy establishment is not yet in this
new reality zone. In analyzing the current confrontation with Russia over Ukraine, consider five poker tables in which the
hands have been dealt: the military cards, economic, diplomatic, hybrid warfare, and court of public opinion. I think Putin has
the high cards in the first four of those games. The only arena in which we can seriously compete is the public sphere—and
there I’d give the Biden team’s effort good marks. On the global chessboard, the fact that in Xi and Putin—not just two
countries but two leaders who each are planning on leading their country for a decade or even two decades ahead—have such
a tight relationship makes the US challenge all that more complicated. But if we recognize the fact, it offers clues about the
timing of any Russian invasion of Ukraine. To make the point, I’m prepared to offer you 4-1 odds that Russia does not invade
Ukraine before February 20. That means I’ll bet $4 against your $1 on no invasion before that date. Why? Because the Beijing
Olympics that begin on Feb 4 run to Feb 20th; Xi has designed what he’s promised will be a “spectacular” show that shines
the spotlight on a China that now stands tall; the most honored foreign guest at this event will be Vladimir Putin; and there is
no way that he will rain on Xi’s parade.
Mecklin: Interesting that something like the Olympics could have that power.
Allison: Yes. And a good reminder that these leaders of countries are fellow human beings. Relationships among them really
matter. Watch the body language. Remember: Putin calls Xi his “best buddy.” While China has only recently been active in
most of the winter sports and thus is not going to win many medals, I have no doubt that the opening and closing ceremonies
are going to be off the charts.
Mecklin: It’s going to be interesting to see them try to do that, in the middle of a pandemic, when exactly nobody goes there.
We’ll see; maybe they’ll pipe the applause in. I wanted to ask about two other things. One is this: You’ve been talking about a
very complicated and difficult management situation for the United States versus a rising China. Within that difficult situation,
how does the United States continue to push for human rights and democracy? I mean, what’s happening to the Uyghurs is
horrible.
Mecklin: Last thing I wanted to ask you about is something that may or may not be fun for you. I’m going to throw an old
proposal of yours back at you—for a White House Council of Historical Advisers.
Allison: Why do we have a Council of Economic Advisers? The answer is because we believe that by analyzing some of the
choices that the president and the government have to make, professional economists can clarify the choices and their likely
consequences. How well do they do? Well, excuse me, look at the inflation we have today. Did they forecast that? Nope.
They don’t have a crystal ball. The real world is highly uncertain. Nonetheless, relative to people who know no economics,
they do a little bit better most of the time. Not as well as they claim—but a little bit better. My colleague Niall Ferguson and I
proposed an analog that could be called the Council of Historical Advisers. They would not have a crystal ball that would
allow them to predict what’s going to happen in the confrontation with China or Russia. But by analyzing the historical
record, and by being systematic about historical analogies that policy makers grab in trying to make sense of a confusing world,
like Cold War or containment, they can help illuminate the challenges that we face and the choices. I’m happy to report that
the Applied History movement now includes not just Harvard and Stanford, but vibrant work at the Kissinger Center at Johns
Hopkins, the Clements Center at the University of Texas at Austin, at Duke, Ohio State, Berkeley and a dozen other
universities that actively have people doing this. If the question were, “What the hell is going on in the current confrontation
with Putin, and why might he be doing this now?”, that would be a good question to give to the Council. And you can see
the pontification about it in a many, many publications, who knows maybe even your own.
Allison: To be suggestive, let me mention one of the tools in the Applied History toolbox. It begins with the recognition that
for many policy makers and most of the foreign policy community, in what’s been called the United States of Amnesia, every
day is a new day where we begin with a clean whiteboard. Thus, the current confrontation with Putin is like a frame or
snapshot from the course of a movie. But the applied historians remind us that what we see today is just the most recent frame
in a process that has evolved over the past year or even decade. So the applied historian asks: “Show me the main scenes in the
movie that led to the current picture. Or how about give me the main events in the movie that led to the current picture?”
That sequence goes back at least to 2014 when Putin seized Crimea. Analyzing that event, what were the underlying factors,
what were the proximate causes? The historian would note that this came after the color revolutions that overthrew
governments in Georgia and Ukraine; that the EU was in a bidding war with Russia over Ukraine; that the Yanukovych
government which the US certified had been legitimately elected was overthrown by the Maidan demonstrations; that the
new government had Ukraine on a fast slide towards the EU. All this presented Putin the specter of the Russian navy’s major
warm water port in Sebastopol, which had been built by Catherine the Great, falling under the control of NATO—an
outcome no Russian would accept if there were any alternative. And to understand that, the historian would go back to scenes
from 2008 when at the NATO Summit in Bucharest the Bush administration, and [Secretary of State] Condi [Rice] pushed
for an entry into NATO of Georgia and Ukraine.
In trying to answer the question of why Putin is acting now, in 2022, an applied history analysis would review key scenes over
the past two years: actions by Ukraine, Europeans, and the US as well as those by Russia or others. Answering that question
would require overcoming the myopia that dominates most thinking in Washington—what HR McMaster called “strategic
Pakistan inherited a legal and judicial system from the British rulers. While the colonial masters have moved forward with time
and modified their laws and procedures consistently, we are still frozen in the 1850s. A number of well-informed
commentators have diagnosed the weaknesses and shortcomings of the system, both on substantive matters as well as
procedural issues. There is a broad consensus that the present system is inequitable, expensive, protracted and time consuming.
The proceedings span decades to obtain a final decision and, having reached that stage after so many appeals and reviews by
multiple tiers, the execution of decrees is slow and cumbersome. Frivolous litigation without any substantial penalties,
tampering of evidence and retraction by key witnesses under pressure and due to monetary benefits are prevalent widely. Use
of modern ICT tools in case management, recording of evidence, transparency in preparation of cause lists, servicing of
summons and other administrative matters are also sporadic and selective. The quality and content of legal education,
enrolment as lawyers, non-observance of the code of conduct and the open display of rowdy behaviour, and the inherent
conflict of interest in regulation are issues that have been highlighted several times by well-meaning members of the Bar
themselves. Further, the human resource management of the judiciary falls below the desirable benchmarks due mainly to
factors such as the method of appointment of judges at the entry level and their perfunctory training, promotion based on
seniority rather than performance and expertise, reluctance to weed out the incompetent and corrupt, and payment of same
amount of compensation across the board to everyone. The recent debate on the basis of appointment to the Supreme Court
— seniority or merit — reflects the divergence of views within the profession itself about the possible direction of high-level
judicial appointments. It is indeed gratifying that some highly competent individuals of caliber and integrity have been
appointed to the Supreme Court in the last few years on the basis of merit, expertise and performance rather than seniority.
Each one of the topics mentioned in the previous paragraph has been widely debated in newspapers, electronic and social
media, seminars and conferences ad infinitum by able lawyers, retired judges and scholars. The first Law Reform Commission
was formed in 1958, followed by another in 1967 with several committees on judicial reforms in the intervening period until
1979 when a fulltime standing Law and Justice Commission headed by the chief justice of Pakistan was set up to constantly
work for the improvement, modernization and reforms of the legal system. Another committee created in 2002 — the
National Judicial (Policy making) committee — also exists and formulated the 2009 National Judicial Policy. Each commission
and committee has come up with very sensible and practicable suggestions but somehow the progress in adopting and
implementing them has been extremely lethargic. It is time to translate these recommendations and proposals into time-bound
result-oriented actions. The subject I wish to take up here is the severe economic costs caused by the protracted delays and
frequent unjustified adjournments, indefinite stay orders, multiple stages of appeals, suo-motu cognizance taken by the
Supreme Court and consequential judicial activism, and the lingering pace of execution of decrees awarded by the courts.
Before discussing the economic costs in some detail, two suggestions would go a long way in addressing some of the issues
facing our legal system. First, the whole administrative structure of the judiciary — from the lower courts to the Supreme
Court — needs a complete overhaul in the induction, promotion, training and severance of human resource and bringing in
experts and specialists in fields such as economics and finance, ICT, adoption of ERP and e-office, e-case management systems
with dashboards along with a centralized data center and dynamic website; reengineering of business processes; adequate
physical infrastructure for the judges ,their staff; and regular monitoring and reviews by the Law and Justice Commission. The
antiquated system of ‘readers’ and ‘nazirs’ and clerks needs to be replaced by a professional management system. Second, the
Alternate Dispute Resolution (ADR) mechanism and small-cause courts without the representation of the lawyers would
bring a lot of relief to poor litigants who cannot afford the costs of litigation; it will also help reduce the burden on the courts.
It is seldom realized that there is a close causal relationship between economics and law that runs both ways. Usually, they are
considered two separate disciplines with little shared linkages. This is not correct. In fact, rule of law, sanctity of private
property and contract enforcement form the basis of all economic transactions. Markets cannot function efficiently without
observing these underlying principles. Disputes between the contracting parties are adjudicated, mediated, resolved or
arbitrated by the judicial system. In the realm of economic governance, interpretation of laws, regulations, and rules belong to
the domain of the judiciary and their verdicts are binding upon the executive branch. There is hardly any recognition that
incorporating economic analysis in judicial verdicts can potentially resuscitate dead capital buried in informal and illegal
settlements and squatters, promote financial savings, augment tax revenues, reduce land speculation and prices, enforce
banking and other regulatory compliances, minimize elite stranglehold and bring about many other economic benefits to
society. It has been found that whenever economic analysis is taken into account and expert opinions have been sought by the
judges, the quality of the verdict improves and the economy benefits. We are by no means arguing in favour of the Chicago
Huge amounts of money has also been invested by aspiring middle class families in purchasing plots of land, booking
apartments and renting dwellings. Due to the absence of a weak and fragmented regulatory framework and prevailing corrupt
practices in land allocation, utilization, conversion and registration, a large number of irregular and illegal housing cooperative
societies have sprung up throughout the country taking over fertile agriculture land and also sucking in billions of savings of
middle class aspirants for getting decent housing. Many of these societies have left incomplete structures and buildings not fit
for occupation while legal proceedings are held up and not concluded for years altogether because of adjournments and stay
orders or absence of lawyers on the dates of hearings. While the main responsibility lies with the executive branch for allowing
a laissez-faire environment without a single regulatory agency overseeing the real-estate sector, the judiciary at the lower level
hasn’t helped much. Housing is both a social as well as an economic asset. Deciding these cases expeditiously would help these
middle classes acquire assets which can be used as collateral for other economic purposes. The country would witness a
quantum jump in liquidity and augmentation of savings in the financial system as the disenfranchised poor and the lower
middle classes become part of the formal sector. In place of the present tendency of the courts to order demolition of built
structures in which the middle class has invested all their savings, a better approach is to regularize and confer property rights
upon them while severely punishing the developers, builders and the complicit officials responsible for the infractions. The
judges as executive magistrates can also direct the urban development authorities in their districts to take preventive measures
that such irregular and illegal construction does not take place and ask for reports at regular intervals. Citizen complaints on
portals against such violations and whistleblowers should also be encouraged. The recent judgments of the Islamabad High
Court on the acquisition of land from poor owners and allotting them at several times below market prices to bureaucrats,
judges and generals are indeed a breath of fresh air. Overnight the members of this elite class become millionaires, making
huge windfall gains by a stroke of the pen of their colleagues at the expense of the dispossessed poor owners of the land. This
injustice and use of discretionary powers to benefit a small class of the connected and well to do should be brought to an end
all over the country using the Islamabad High Court verdict as a precedent. A substantial amount of non-performing loans
cannot be collected by the banks as the defaulters have obtained stay orders that have been in force in many cases for several
years. The willful defaulters are enjoying conspicuous consumption at the expense of the bank depositors. As the ratio of
non-performing loans declines, the cost of advances to borrowers is also reduced, thus spurring investment. Similarly, the FBR
has recently reported that more than Rs3.5 trillion of taxes due cannot be realized from those who have understated or
concealed incomes or evaded tax payments due to on-going litigation in the courts. Those from whom these amounts are due
are in fact living comfortably or rolling over the money for business purposes while the country is facing a shortfall in revenue
mobilization. Imagine if the courts decide these cases quickly and half of this amount is collected (and a deterrent effect is
created for the future) how much borrowing the government would be able to avoid every year. Regulatory agencies such as
the Competition Commission of Pakistan (CCP), National Electric Power Regulatory Authority (Nepra), Oil and Gas
Regulatory Authority (Ogra) are confronted with a similar problem. It was after 11 years that the question of the jurisdiction
of the CCP post-18th Amendment was resolved by the Lahore High Court. Hundreds of millions in fines and penalties could
not be collected because of the stay orders given by the courts. Regulatory effectiveness and the deterrent effect are diluted by
unending litigation due to these long pendencies Several glaring examples of suo-motu action and judicial activism that have
brought enormous economic and financial losses to Pakistan have been well documented. One such case pertains to the
Pakistan Steel Mills. During the tenure of the late Col (r) Afzal, a hardworking, dedicated man of integrity the Steel Mills were
a profit-making entity that had repaid its loans before the due date. But this profitability was not the normal outcome but an
exception. Most of the years since their start, the Steel Mills were running in losses due to overstaffing, incompetent and
corrupt management, inefficiencies in production and sales. The government decided that as it was a commercial enterprise it
was best to privatize it through an open competitive process. The transaction was successfully structured and completed and
won by a strategic investor group. Pakistan Steel was designed originally with a production capacity of three million tons and
the infrastructure was laid for meeting that capacity. Under government ownership, the actual production never exceeded one
million ton while bearing the fixed cost of three million tons. It was expected that the successful private-sector bidder would
invest a large sum to bring the capacity to its full utilization. This way the government would be relieved of subsidizing the