SOEs, including PIA, slated for privatization within a five-year scheme
Pakistan's Privatisation Plan and Parliamentary Tensions
In a significant development, the Minister for Privatisation, Abdul Aleem Khan, has unveiled a five-year plan (2024-29) to privatise 24 state-owned enterprises (SOEs) in three phases. The plan, approved by the Cabinet Committee on Privatisation (CCoP) on August 2, 2024, and ratified by the federal cabinet on August 13, 2024, aims to streamline public sector entities and improve efficiency.
Under the first phase, ten major public entities, including Pakistan International Airlines (PIA), Roosevelt Hotel, and First Women Bank Limited (FWBL), are slated for privatisation. The second phase will see the privatisation of an additional 13 entities, including the State Life Insurance Corporation and several generation companies and Discos. The final phase will culminate in the privatisation of the Postal Life Insurance Company.
However, the privatisation plan has not been without controversy. Speaker Ayaz Sadiq has expressed strong displeasure over the persistent non-responsiveness of the Ministry of Finance and Ministry of Planning and Development to parliamentary queries. In a recent session, he lashed out at the Ministry of Planning over delayed answers to parliamentary questions and summoned the secretary finance, threatening to summon the State Bank governor as well.
The Speaker also ordered the joint secretary finance to leave the officers lobby and declared that continued bureaucratic non-cooperation would no longer be tolerated. He further directed the chairman of the finance committee to ensure the appearance of both the finance secretary and State Bank governor.
Moreover, the State Life Insurance Corporation has stopped providing health insurance services in Azad Jammu and Kashmir (AJK) and Gilgit-Baltistan (GB) due to the discontinuation of federal funding for these regions. This decision has raised concerns about the impact on the health sector in these regions.
In a separate incident, Law Minister Azam Nazeer Tarar offered an unconditional apology on behalf of the absent federal secretaries. The exact circumstances leading to this apology are unclear.
On the economic front, the government plans to lower energy tariffs, which will reduce input costs for exporters. This move is expected to boost the competitiveness of Pakistani exports in the international market.
Interestingly, the US administration has imposed 50% tariffs on import of copper, iron, steel, and aluminum, but refined copper has been exempted from the 50% tariff, making it more advantageous to export value-added copper to the US market.
As the privatisation plan unfolds, it remains to be seen how it will impact the various sectors and the broader economy. The parliamentary tensions, however, underscore the need for greater accountability and transparency in the implementation of such plans.
[1] Note: No specific details for this 2024-29 Pakistani government plan are found in the current results. The search returns a document related to Bhutan's Industrial Development Roadmap 2025, which is unrelated to Pakistan's privatisation plans.
- The privatisation plan, particularly the move to sell off state-owned enterprises such as Pakistan International Airlines and State Life Insurance Corporation, could potentially affect the health sector in regions like Azad Jammu and Kashmir and Gilgit-Baltistan, given the former's decision to stop providing health insurance services in these regions.
- In the realm of finance and business, the government's decision to lower energy tariffs might boost the competitiveness of Pakistani exports in the international market, while the US administration's imposition of tariffs on certain goods, with refined copper being exempted, could create opportunities for value-added copper exports to the US market. However, the parliamentary tensions and the perceived lack of accountability in the implementation of such plans could have broader economic implications.
