Impact of Privatization on the Service Sector of Pakistan

Abstract

Privatization promotes economic efficiency and growth, thereby reinforcing macroeconomic adjustment. In the short run, however, it can lead to inefficiency, job losses and wage cuts for workers. This paper discusses these negative impacts of privatization on the service sector in Pakistan. Performance of the Service sector considers the indicators of GDP, Investment and Employment. It specifies how privatization affects the rate of economic growth with respect to the GDP, Investment and Employment. Numeric data was collected and analyzed from secondary sources .T-test was applied to generate results. The analysis supports the claim that GDP, Investment and Employment in the service sector decreased after Privatization. The assumption is proved that there is a negative influence of Privatization on GDP, Investment and Employment in the Service sector (as t value for GDP, Investment and Employment were less than 2 and significance (2 tailed) was greater than .05).Recommendations are based on the economy and service sector of the country.