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DenationalizationOperational Difficulties
Preliminary work is likely to be required before denationalization can commence. This is particularly true where entities have been subject to colonial or other misrule. For instance, in Poland great difficulties have been encountered in making restitution to the victims of communism; in particular, the tracing, discovery, and evaluation of title documents have caused delays and disputes. Similarly, in many states disregard of the environment has made it necessary to formulate policies assigning responsibility for cleaning up current and future damage. Rarely have the alternatives to denationalization been adequately evaluated. This leads to the following observations: first, denationalization has been applied only to existing enterprises-creation of new ventures has not been addressed; and second, the relatively draconian remedy of denationalization appears to have been favored over lower cost alternatives such as repair, development, absorption, or abandonment. Some techniques for implementing denationalization (such as sales on the stock market, distribution of vouchers to eligible citizens, transfers to management, etc.) have been dogged by difficulties. For example, preliminary to denationalization it may be necessary to broaden public participation in thin securities markets. Also, both price erosion and price explosion from offering prices have occurred at privatized companies marketed as initial public offerings. (The offering prices should have treated both investors and taxpayers fairly.) A denationalized entity is subject to normal business risks; however, rarely have these risks been identified, analyzed, or controlled. One such risk, management fraud, represents a particularly dangerous threat. Managers have literally stolen firms; they have sold or leased the assets to shell companies owned by friends or to joint ventures set up with foreign partners, in which they had some kind of stake or guarantee of employment (Gordon, 1994). For instance, in Kuwait alumni of the 1982 collapse of the Souk al-Manakh (which involved violations of religious and secular laws) are said to have been allowed to buy into a denationalized company at bargain prices! In general, national audit agencies have become involved in denationalization on an ex post facto rather than on a proactive basis; the latter would have tended to make fraud more difficult. In Pakistan the privatization commission itself has become a focus of investigation; it has been reported that its program was well conceived, but that ground rules were not followed ("Pakistan Investment," 1995). Numerous technical shortcomings have further impeded denationalization. These include absence of a comprehensive strategic plan, unrealistic timetables, inaccurate cost and income projections, inadequate monitoring of progress, and lack of a post?mortem review of the entire process. The direction of privatization will now be evaluated in light of the teachings of Islam and of Islamic economics (iqtisad). 
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