At a recent pre-budget conference in Lahore, Finance Minister Muhammad Aurangzeb underscored the necessity of privatization, refuting the concept of “strategic state-owned enterprises (SOEs).” This statement follows Deputy Prime Minister Ishaq Dar’s declaration that the government would restrict its involvement to SOEs that are deemed strategic and essential, intending to diminish their quantity following a thorough review.
During the Cabinet Committee on Privatization (CCoP) meeting, presided by Ishaq Dar and attended by the finance minister, the imperative of privatizing financially unviable SOEs was underscored. The meeting also recognized the classification of 40 SOEs as strategic or essential, and outlined that relevant ministries must submit their particulars to the Cabinet Committee on State-Owned Enterprises (CCoSOE), which will be tasked with determining their classification.
In his address at the conference, Finance Minister Aurangzeb proclaimed, “There is no such thing as [a] strategic SOE.” He echoed similar sentiments from the prior meeting chaired by Dar, emphasizing that “there is no such thing as a strategic SOE.” He also disclosed plans for an upcoming meeting where ministries would be mandated to transfer control of SOEs to the private sector through public-private partnerships, with an expedited agenda for privatization.
Addressing concerns regarding the privatization of Pakistan International Airlines (PIA), Aurangzeb clarified that the government was evaluating bids from both local and foreign investors, dispelling the notion that they were exclusively seeking foreign investors. This representation of a diverse group of investors aligns with the government’s broader stance on privatization.
Concerning a potential loan program with the International Monetary Fund (IMF), Aurangzeb emphasized the need for a larger and long-term program to achieve enduring macroeconomic stability and institute structural reforms. He also accentuated the necessity for energy reforms, affirming that efforts to address leakages and combat theft were in progress. Additionally, he mentioned the restructuring of the boards of distribution companies (Discos) to incorporate private sector representatives, ultimately aiming to enhance corporate governance and facilitate potential concessions or privatization plans for the Discos.
In conclusion, Finance Minister Aurangzeb’s remarks at the conference elucidate the government’s position on privatization and the administration of state-owned enterprises. The emphasis on public-private partnerships and the consideration of a diverse investor base indicate a forward-looking approach to economic reforms, with a focus on sustainable stability and enhanced governance.
For additional business, finance, and tech insights from Pakistan and across the globe, follow Dawn Business on Twitter, LinkedIn, Instagram, and Facebook.