Women bank's sell-off

The privatisation of First Women Bank Limited has come up as the federal government's first success in its protracted efforts to offload the loss-making state-owned enterprises and create some fiscal space to give a push to the national economy. The women bank's disinvestment marks the official transfer of a majority stake in this state institution to UAE government's International Holding Company - in what is the first-ever government-to-government transaction in Pakistan's banking sector.

While it is hoped that the women bank's privatisation will prove to be "the first drop of rain" amid the government's renewed push for disinvestment, there are serious challenges hindering the privatisation process that is pivotal to the pursuit of the policymakers for macroeconomic stabilisation. There is no denying that the government has failed to foster a stable macroeconomic environment to attract foreign investors in the various sectors of the economy. Major obstacles in the context include lack of transparency and accountability; absence of a robust regulatory framework to protect investors and ensure a competitive environment; a dilapidated road network; a near-archaic internet and telecommunication system; political instability; overstaffing; high energy prices; etc.

No wonder our financial czars are struggling to privaitse even our flag-ship institution like PIA. There seems to no takers either for our loss-making power distribution companies that continue to add to our circular debt burden. And many of our 24 state-owned enterprises – that have been put on sale under a revamped privatisation campaign – have been a bitter failure at finding any buyers.

The government's success to stabilise the economy and then push it into the growth phase largely depend upon the disposal of the state enterprises that are nothing else than a growing financial burden. There is need to focus on the irritants and pave way for a smooth privatisation drive.