The PTI-led government has decided to take on the tough challenge of turning around some 195 government-run ‘sick’ enterprises such as Pakistan International Airlines (PIA), the Pakistan Railways and the Pakistan Steel Mills. In a meeting of the federal cabinet on Thursday, chaired by Prime Minister Imran Khan, the government decided to set up the Sarmaya-e-Pakistan Company (SPC) to revive sick state-run entities. Information Minister Fawad Chaudhry says the SPC will be formed on the lines of the Singaporean and Malaysian models, and the PM will head the SPC’s board to personally spearhead the effort.
This seems to be a part of the government’s 100-day plan, unveiled soon after their election in July. Imran had promised that his government would be building a national wealth fund to oversee a turnaround in state-owned-enterprises (SOEs) in the country. The idea for the fund was to move around 200 state companies out of the purview of various ministries and departments — and hence the government interference — so that they can be reformed. This was revealed in an interview given by Asad Umar, who suggested that the move was aimed at preparing the ground for securing a bailout from the International Monetary Fund (IMF) — which the government is currently negotiating.
Umar had further hinted that the fund could also serve as a first step in a massive clear-out of loss-making SOEs to lower the government’s debt burden. And it is here that Chaudhry’s comments betrayed the real motive behind the government’s move. He says these 195 government entities are facing several problems and running into loss and cannot be privatised.
Irrespective of the arguments surrounding privatisation of state-run entities or even the prime minister’s past stance on the subject, this is another area where he can tick off a promise as delivered within his first 100 days of government. The move could prove to be the key to securing the IMF bailout and turning around the economy. But the government needs to be more transparent about the ultimate objective of the SPC.
Published in The Express Tribune, November 17th, 2018.
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