A3-51322 - Training on Globalisation and Trade Union Strategies, Final Report
FINAL REPORT
On
GLOBALISATION
&
TRADE UNION STRATEGIES
By
Kashif Talib
kashiftalib@hotmail.com
Pakistan Workers’ Federation [PWF]
www.pwf.org.ok
Part I: Globalisation in your Country – what are the transformations taking place?
Economy & Employment
Population
Religion
Annual Per capita
income
GDP
GDP (purchasing power parity)
Imports
GDP - composition by
sector:
Unemployment rate:
Literacy rate
Agricultural Growth
Rate
Employment
153.96 million (E)
95% Muslims, 5% others.
US $736
8.4%
$395.2 billion (2005 est.)
Industrial equipment, chemicals, vehicles, steel, iron
ore, petroleum, edible oil, pulses, tea.
Agriculture: 21.6%
industry: 25.1%
services: 53.3% (2005 est.)
6.6% plus substantial underemployment (2005 est.)
53%
7.5% in 2004-05
Total Labour force
Employed Labour Force
Agriculture Sector
Manufacturing & Mining sector
Construction
Trade
Transport
Others
http://www.pak.gov.pk/BasicFacts.aspx
1
46.84 million
43.22 million
18.60 million
5.96 million
2.52 million
6.39 million
2.48 million
6.98 million
A3-51322 - Training on Globalisation and Trade Union Strategies, Final Report
Yearly Inflation Rates of Pakistan (1990-91 = 100)
Inflation Rates based on Sensitive Price Indicator (SPI), Consumer Price Index (CPI) and
Wholesale Price Index (WPI)
Period
1991-1992
1992-1993
1993-1994
1994-1995
1995-1996
1996-1997
1997-1998
1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
SPI
10.54
10.71
11.79
15.01
10.71
12.45
7.35
6.44
1.83
4.84
3.37
3.58
6.83
11.55
7.02
CPI
10.58
9.83
11.27
13.02
10.79
11.80
7.81
5.74
3.58
4.41
3.54
3.10
4.57
9.28
7.92
WPI
9.84
7.36
11.40
16.00
11.10
13.01
6.58
6.35
1.77
6.21
2.08
5.57
7.91
6.75
10.10
http://www.statpak.gov.pk
Privatisation
Government Policy and Objectives
Only a strong and dynamic private sector can help Pakistan achieve its long-term
economic growth and employment objectives. The Government's policy of liberalisation
and privatisation is aimed at promoting market-based, private sector-led growth. Longterm growth is at the heart of poverty reduction. Distorted prices, lack of competition,
and poor government management of businesses have hindered economic development,
introduced inefficiencies, generated unproductive and unsustainable employment, slowed
down investment, reduced access to services by the poor, resulted in sub-standard goods
and services, and contributed to fiscal bleeding. Privatisation can help change this.
Privatisation would also send a strong signal to investors of the Government's faith in the
private sector to generate economic growth and productive employment. International
investors, in particular, view privatisation as a principal proxy of the seriousness of a
government's reform program. Privatisation also provides an impetus for needed pricing,
deregulation, and taxation reforms and for an improvement in services, such as electricity
and telecommunications, which are essential for a supportive business climate and the
generation of productive jobs, economic growth and prosperity.
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A3-51322 - Training on Globalisation and Trade Union Strategies, Final Report
An improved business climate would bring in new investment, reversing the capital flight
that has occurred in recent years. Privatisation would also bring in better management
with the right incentives to cut waste, reduce corruption, and improve the coverage and
quality of services that are essential for both businesses and households. To the extent
that excess staff are laid off, human capital would be freed up that could be more
productively employed in the private sector, which would become more vibrant after
receiving improved infrastructure services. At the same time, the Government would be
free from micro-managing businesses. Senior policy makers presently spend much time
and effort in making business decisions to attempt to stop the fiscal bleeding from stateowned enterprises and/or to improve their efficiency.
In addition to privatising companies by handing over management control to new
investors, the Government would like to use privatisation as a means of broadening the
ownership of assets, mobilising savings, and helping strengthen capital markets. For this
reason, the Government plans to sell minority shares via the stock market in selected
companies either before or after the transfer of management control. Listing and selling
companies in the local stock exchanges is likely to give a much-needed boost to the stock
markets and help tap into savings. Simply listing a 100 percent government owned
company in the stock exchange may also improve corporate governance as the company
will be obliged to comply with the stringent reporting requirements of the stock exchange
and Securities and Exchange Commission.
The Government is firmly committed to carrying out the privatisation in a fair and
transparent manner. This includes ensuring a level playing field for existing and future
entrants, protecting consumer and taxpayer interests, and dealing with public employees
in a fair manner. The PC Ordinance 2000 strives, among other things, to ensure that such
policy objectives are met. In addition to specifying advertising requirements to ensure the
widest possible participation in privatisation, the Ordinance directs the Privatisation
Commission to advise that monopolies are not created in the privatisation process, to
propose or strengthen a regulatory framework for independent and fair regulation, and to
advise on deregulating the economy to the maximum extent possible. To download a
copy of the Ordinance,
To ensure that the proceeds of privatisation are not squandered away, the PC Ordinance
specifies that 90 percent of privatisation proceeds will be used for debt retirement and 10
percent for poverty alleviation. Reducing the debt service burden will help strengthen the
fiscal situation. Fiscal finances will also be strengthened as the Government will no
longer have to finance the losses of the SOEs that have been privatised. Also, as
privatisation is likely to enhance profits, the resulting higher income tax revenues and
increased profits per share on any remaining Government shareholdings will further
strengthen the fiscal position.
Last, but not least, privatisation is seen as a way to reduce corruption. The experience in
many countries, including Pakistan, is that public ownership of businesses provides many
opportunities for corruption. Allocating public funds to unfairly benefit an individual or
firm is typically the costliest form of corruption. This may occur via kickbacks on the
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A3-51322 - Training on Globalisation and Trade Union Strategies, Final Report
purchase of goods and services or by providing favored treatment to an individual or
company. Often a poor business decision is really a well-thought out decision calculated
to benefit a small group of employees and a private firm or individual at the expense of
society. Theft and abuse of public property are other forms of corruption. Some
employees of public companies providing services such as electricity, telephony, or
banking may collude with certain consumers to provide free or cheap services in
exchange for side payments. Decision makers, senior ministry officials, and other
influential people may exacerbate the situation by staffing state-owned enterprises with
their cronies and supporters and by pressuring state-owned banks to lend funds to
bankrupt state-owned companies or to influential businessmen for risky or dubious
projects. Honest consumers and taxpayers become the big losers. Privatisation will help
curtail all such forms of corruption.
Some important units which are privatized during 1991 to 3rd quarter of 2006 are listed
bellows and the full list of privatized unites can be found at the official web site of
privatization commissioning of Pakistan (http://www.privatisation.gov.pk/)
From 1991 to August 12, 2006
Rs (in million)
Unit Name
Sale Price
Date of
Transfer
Buyer Name
Banking and Finance
Bank
Allied Bank Limited (51%)
Muslim Commercial Bank (75%)
971.6
2,420.0
Feb-91
Apr-91
EMG
National Group
618.7
Jun-96
LTV Group
1,633.9
Jul-97
Sh. Nahyan bin Mubarik AlNahyan
United Bank Ltd. (51%)
12,350.0
Oct-02
Bank Alfalah
51% GOP Stake in HBL
620.0
22,409.0
Dec-02
Consortium of Bestway & Abu
Dhabi Group
Abu Dhabi Group
Dec-03
Agha Khan Fund for Economic
Development
3,032.5
Aug-94
Bankers Equity (51%)
Habib Credit & Exchange (70 %)
Telecommunications
PTCL (2%)
PTCL
(10%)
26% (1.326 billion) B class of shares
of PTCL
Carrier Telephone Industries
27,525.9
Sep-94
General Public thru Stock
Exchange
Through DR form
155,000.0
Jul-05
Etislat-UAE
500.0
Oct-05
Siemens-Pakistan Engineering
Co. Ltd.
85.5
Jan-93
Jehingir Awan Associates
1.2
Jun-95
Hamid Mirza
128.0
Oct-05
Sadaf Enterprises
185.0
Oct-93
Army Welfare Trust
26.6
Jun-95
Syed Tajmir Shah
Textile
Quaidabad Woollen Mills
Cotton Ginning Factory
Bolan Textile Mills
214.7
Newspapers
N.P.T Building
Mashriq – Peshawar
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A3-51322 - Training on Globalisation and Trade Union Strategies, Final Report
Mashriq – Quetta
Progressive Papers Ltd.
6.2
Jan-96
EMG
46.1
May-96
Mian Saifu-ur-Rahman
6.5
Aug-96
EMG
190.9
Jun-98
Imperial Builders
39.2
Jan-99
Hussain Global Assoc.
364.0
1,211.0
Dec-99
Jul-04
Shahid Gul & Partners
4B Marketing
Mashriq – Karachi
Tourism
Cecil's Hotel
Federal Lodges - 1- 4
Dean's Hotel
Falleti's Hotel Lahore
Cement
Javedan Cement
4,316.0
26-9-2005
Haji Ghani Usman &
Group
156.0
20-7-2006
Raees Ahmed
Textile
Lasbella Textile Mills
http://www.privatisation.gov.pk/about/Completed Transactions (new).htm

Public Services – Those public services which are privatized in Pakistan became
more expensive, like banking sectors when the banks were in government sector
at that time there were no service charges to maintain an account but after
privatization these banks also apply so many service charges to maintain accounts,
which is not affordable at all for low income workers.
International Trade Agreements

No there is no bilateral or multi-lateral trade agreements with any country

In Pakistan the unions have very less opportunity to provide their inputs, few year
back the employers and workers formed a forum called WEBCOP and they
recommended joint reforms in Industrial relation ordinance (IRO 1969) but
government simply ignore the joint recommendations and they came up with
there own changes under IRO 2002, and the trade unions are protesting against
that ordinance and few changes are made.
Part II: Labour Relations
1. What are the major demands being raised by the trade unions to employers and
governments?
The major demands are to protect the jobs before and after privatization, then
increase in the wages according to the inflation in prices. Here one alarming thing
is that TU rights are fully/partially banned in various sectors of economy.
2. Collective bargaining processes – in which sectors of the economy does collective
bargaining take place, what have been the salient features of recent Agreements,
and what kind of demands have employers raised?
In banking and telecom sector few agreements took place and the key features are
job security, rise in wages, and increase in social benefits.
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A3-51322 - Training on Globalisation and Trade Union Strategies, Final Report
3. Trends in Union Membership (increase or decline) – national data on unionized
and non-unionized workers, by sector, gender, age.
http://www.statpak.gov.pk/depts/fbs/publications/lfs0506_q3/t13.pdf
Part III: What can trade unions do to meet the challenges of Globalization?
4. What are the weaknesses of Trade Unions as organizations for workers
representation today? How can trade unions be strengthened?
In third world countries like Pakistan where the trade unions are facing banns,
sanctions and overall environment for trade union growth is not favourable its is
really difficult for trade unions organization to sustain at unit level as well as
national level, more over the current Military regain in Pakistan is not giving any
importance to workers representatives, even in this situation the Trade unions
organization like Pakistan Worker’ Federation (PWF) is putting their all efforts to
help works and to protect their rights. PWF is education their workers about their
rights so that they can strengthen themselves as well as other workers.
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A3-51322 - Training on Globalisation and Trade Union Strategies, Final Report
5. What can be done to organize unorganized workers? What strategies can be
pursued (are there any examples)?
After the merger PWF main focus is to organize the workers to increase their
membership and to strengthen the TU in Pakistan, for this purpose the PWF is
educating their workers and members and teaching them the techniques to
organize the unorganized workers and at all region level the main leadership is
giving special attention to this program, the results of this campaign are quite
encouraging.
6. What should be the attitude of the trade unions towards International Financial
Institutions (IFIs)? How can trade unions influence policies of the IFIs towards
their country?
Then International Financial Institutions can play very vital role to uplift the workers rights
in their respective countries, like when the IFIs provide loans or assistance to there
members countries they show their concern about social and environmental factors,
similarly they should show their interest in workers and TU rights. This is the duty of
international trade union organizations to educate and aware those IFIs about there role,
through which we can protect workers rights.
7. What can be done to build and improve international trade union solidarity?
To build a strong international trade union solidarity its is very essential to
improve interaction among the Trade unionists of different countries, so that they
can share there experiences and ideas with each other as well as is equally
important to build a strong, fast and close communication network, at this time
the international trade union is badly lacking in this regard. Another important
thing is to train and educate the third world countries trade unionists at
international level so that they can understand and implement international
experience and technique at national level and it s really help to strengthen
international trade union solidarity.
8. What role can ILO play in strengthening trade unions? What role can trade
unions play in the ILO?
ILO as an international tri-partite body, they can play a vital role to strengthen trade union
in their member countries, most of the member countries they already ratified ILO
conventions but the implementation of those conventions is very poor, so in my point of
view the ILO should take some initiative to pursue the implementation of ratified
conventions, as long as the trade union role in ILO is concern they should increase
pressure and they should increase workers representation within ILO.
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