Privatization as an instrument for development is rmdingsignificant currency in industrial and developing countries throughoutthe world. 1YPically, its need arises from the concerns over efficiencywith which the state can manage public enterprises (PEs) or large andgrowing claims of these enterprises on national budgets. In Pakistan itsneed emanates from both. Barring a few years in the early 1970s, thepolicy of development through private enterprise remained the mainstayof the Government of Pakistan (GOP) economic policy throughout the fourdecades of the country’s life. In fact, a policy of privatization i.e.,transferring public assets to the private sector control remained anenunciated policy in the 1950s and the 1960s, which was again adopted inthe late 1970s. However· it was not until late the 1980s that concertedefforts were mounted to breath life into the moribund programme ofprivatization. In developing a programme for privatization the questionfaced by us concern the size of the existing PE sector, its performance,constraints in and prerequisite for privatization. The most importantquestion is can we privatize all PEs, if not, then what productivityenhancing measures can we take for enterprises which cannot beprivatized in the immediate future.