This suggests a wider belief among some international financial institutions that privatization can be crucial for loss-making SOEs. The privatization of loss making state owned enterprises SOEs is not a remedy but rather a critical component of a wide-ranging economic revitalization strategy. By taking hold of the opportunity for reform, Pakistan can chart a course towards sustainable growth, unlocking its full potential on the global stage. The time for action is now, and the imperative for privatization is unequivocal. Transparency and accountability must reinforce every facet of the privatization process to foster public trust and confidence. Stakeholder engagement, including dialogue with labor unions and civil society organizations, is paramount to navigate the complexities of privatization effectively.

240 million people nation stands at a critical economic and financial juncture a, monetary and fiscal challenges demand bold and decisive action. Abdul Aleem Khan, new minister for privatization and investments, to expedite the privatization process of state owned enterprises comes as a resolute step towards addressing the country’s economic woes. Aleem Khan’s assertion that at least 15 to 20 loss making public entities require immediate privatization underscores the urgency of the situation. It’s a call to embrace pragmatism over populism, recognizing that the survival of Pakistan’s economy hinges on strategic reforms. Earlier successive governments have hesitated to undertake unpopular reforms, particularly in privatizing entities like Pakistan International Airlines (PIA), the national flag carrier. However, the gravity of Pakistan’s economic crisis necessitates a departure from conventional approaches. The agreement with the International Monetary Fund for a $3 billion bailout last June marked a crucial turning point, compelling Pakistan to commit to overhauling its loss making SOEs.

Under the stewardship of interim Prime Minister Anwaar-ul-Haq Kakar’s caretaker government, promises were made to enhance governance within SOEs, with 10 entities earmarked for privatization or turnaround efforts. The subsequent statement by Minister Abdul Aleem Khan underscores a heightened sense of urgency, highlighting the imperative to expedite the privatization process. Burdened by debts and liabilities PIA is among the entities slated for privatization is PIA, laden by overdue amounts and amount outstanding liabilities amounting to Rs180.6 billion as of September 2023, followed by Pakistan Water & Power Development Authority and Pakistan Steel Mills. Khan’s emphasis on the staggering deficit incurred by PIA over the past five years amounting to 500 billion rupees underscores the untenable financial burden borne by these state owned enterprises.

Privatization is not merely a matter of economic expediency; it’s a vital step towards ensuring the sustainability of Pakistan’s economy. The overhaul of loss making SOEs is not about convincing skeptics but rather about safeguarding the economic future of the nation. The stakes are too high to succumb to inertia or political expediency. The amendment to the 2016 law, which previously hindered the sale of majority shares in PIA, reflects a legislative stride towards facilitating the privatization process. The commendation from the IMF regarding the measures initiated by the Kakar caretaker government underscores international recognition of Pakistan’s commitment to reform.

As Pakistan transitions to a new government under Prime Minister Shehbaz Sharif, the momentum towards privatization must not wane. Prime Minister Sharif’s directive to his finance team to prepare for seeking an Extended Fund Facility (EFF) after the current IMF bailout program expires demonstrates a continued commitment to fiscal reform.

Road ahead will not be devoid of challenges. Privatization initiatives must be accompanied by stringent oversight mechanisms to prevent exploitation and ensure equitable outcomes. Efforts should be made to mitigate the potential socio economic impacts of privatization, particularly concerning employment and service provision.