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Business News/ News / World/  Pakistan PM Shehbaz Sharif says all state-owned enterprises to be sold to private owners, blames lack of funds
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Pakistan PM Shehbaz Sharif says all state-owned enterprises to be sold to private owners, blames lack of funds

Pakistan PM Shehbaz Sharif plans to privatize all state-owned enterprises, including Pakistan International Airlines, to tackle financial challenges and facilitate a business-friendly environment.

Pakistan's Prime Minister Shehbaz Sharif. REUTERS/Hamad I Mohammed (REUTERS)Premium
Pakistan's Prime Minister Shehbaz Sharif. REUTERS/Hamad I Mohammed (REUTERS)

Pakistan's Prime Minister Shehbaz Sharif said on May 15 that all state-owned enterprises, including the financially struggling Pakistan International Airlines, would be privatised.

This decision expands the government's intention to privatize only loss-making state firms.

The announcement to privatize these enterprises, except for strategic ones, follows Pakistan's commencement of negotiations with the International Monetary Fund (IMF) for a new long-term Extended Fund Facility (EFF).

Also Read: Muzaffarabad unrest: 3 killed in Pakistan-occupied Kashmir as strike enters 5th day, Govt allocates aid

According to media reports, Sharif announced this while chairing a review meeting on the privatisation process of loss-making state-owned enterprises (SOEs).

As reported by Geo News, Prime Minister Shehbaz Sharif stated that besides strategic state-owned enterprises, all other entities—whether profitable or loss-making—will be privatized.

Also Read: 'We feel ashamed…': Pak PM Shehbaz Sharif on Bangladesh's economic growth; urged to initiate trade talks with India

Emphasizing that the government's role is to facilitate a business and investment-friendly environment rather than engage in business operations, Sharif instructed all ministries to collaborate with the Privatisation Commission and take necessary actions.

Underscoring the need for transparency in the privatisation process, he ordered the privatisation process of Pakistan International Airlines (PIA) to be televised, including the bidding and other important steps. The report said PIA's privatisation is in its final stage.

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Pakistan's struggling national airline emerged as the nation's third-largest public sector loss-making entity, necessitating a monthly expenditure of 11.5 billion for debt servicing.

Furthermore, the report stated that the privatization process of other institutions will also be broadcast live.

The Express Tribune newspaper reported that a roadmap for the Privatisation Programme 2024-2029 was also presented during the meeting.

The report said ministers were informed that loss-making SOEs were to be privatised as a priority and that a pre-qualified panel of experts was being appointed by the Privatisation Commission to speed up the sell-off process.

Prime Minister Sharif-led government has pushed for privatising several state-owned enterprises to tackle the burden on the exchequer and the prevailing financial crunch.

Also Read: Muzaffarabad unrest: 3 killed in Pakistan-occupied Kashmir as strike enters 5th day, Govt allocates aid

Previously, debt-struck Pakistan had plans to privatise only loss-making state-owned enterprises, the Dawn newspaper reported.

On Sunday, Finance Minister Muhammad Aurangzeb said that privatisation is necessary to achieve economic stability in the country.

“You have to move towards privatisation if you want economic stability in the country," Aurangzeb said during the Pre-Budget Conference 2024-25.

The Washington-based IMF has long recommended privatization for Pakistan, which, as the report highlights, is grappling with a significant fiscal shortfall.

Pakistan avoided default

Pakistan narrowly avoided default last summer, and the economy has stabilized following the conclusion of the previous IMF program. Inflation dropped to approximately 17 per cent in April from a record high of 38 per cent last May.

Despite these improvements, the country continues to face a considerable fiscal deficit. While import control measures have helped rein in the external account deficit, this has resulted in stagnant growth. Growth is anticipated to hover around 2 per cent this year, compared to the negative growth experienced last year.

(With inputs from PTI)

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ABOUT THE AUTHOR
Mausam Jha
A journalist covering International Relations, and Business.
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Published: 15 May 2024, 01:01 PM IST
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