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Tuesday, May 21, 2024

Pakistan to Privatize State-Owned Enterprises, Excluding Strategic Entities

Prime Minister Shehbaz Sharif announces Pakistan's broad privatization plan, excluding strategic entities, to enhance efficiency, transparency, and attract investment, amidst IMF negotiations and a focus on economic reforms.

Prime Minister Shehbaz Sharif announced a comprehensive privatization plan for all state-owned enterprises (SOEs) except strategic entities, aiming to enhance efficiency and attract investment. The decision marks a departure from previous plans, which focused solely on loss-making firms.

During a review meeting, PM Sharif directed federal ministries to cooperate with the Privatisation Commission, emphasizing the need for a transparent process. Notably, the premier ordered the suspension of two Pakistan Agricultural Storage & Services Corporation (PASSCO) officers for negligence in wheat procurement, underscoring the government’s commitment to efficiency and accountability.

Transparency and Accountability in Privatization

Emphasizing transparency, PM Sharif instructed the live broadcast of the privatization process, starting with Pakistan International Airlines (PIA). The move aims to ensure public scrutiny and build confidence in the privatization process. The government plans to complete the pre-qualification process for PIA’s privatization by the end of the month.

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Additionally, a roadmap for the Privatisation Programme 2024-2029 was presented, highlighting the prioritization of loss-making SOEs and the appointment of a panel of experts to expedite the sell-off process. The government’s goal is to streamline operations, improve service quality, and utilize taxpayer funds more efficiently.

Strengthening Economic Reforms Amid IMF Talks

The decision comes amid negotiations with the International Monetary Fund (IMF) for a new long-term Extended Fund Facility (EFF). The government views privatization as a key component of broader economic reforms aimed at improving fiscal sustainability and attracting investment.

Finance Minister Muhammad Aurangzeb reiterated the government’s commitment to broad privatization, dismissing the concept of ‘strategic’ SOEs. He emphasized the need for private sector participation to stimulate economic growth and reduce fiscal burdens.

The privatization plan reflects Pakistan’s efforts to create a more business-friendly environment, attract investment, and improve service delivery. As the government works towards economic recovery and fiscal stability, transparency and accountability remain central to its reform agenda.