In his first major address to the public, Hafeez Sheikh – the adviser to the Prime Minister on Finance and the new de-facto Finance Minister – has revealed the policy directions he intends to take moving forward. A focus on privatisation of both Pakistan International Airlines (PIA) and Pakistan Steel Mills (PSM) is on the cards, and it is welcoming that the government is leaning in this direction because of the losses caused by both to the national kitty.

A brief look at his previous tenure as Finance Minister from 2010-2013 is indicative of consistent attempts to trim the fat and cut costs for the government by privatising loss-incurring state-run companies – if his work in the telecom industry is anything to go by, the state might finally be able to wash its hands off two companies that having been bleeding its coffers dry. The privatisation of both is imperative if the government is to follow through on its attempts to bring down the state’s costs; a yearly loss of Rs200 billion as a result of mismanagement of public sector enterprises all but ensures that Pakistan’s economy cannot stabilise itself until this problem is counteracted. Cutting costs through other mechanisms will not help unless this yearly loss is somehow taken off the state’s already burdened shoulders.

This might also be the best opportunity to privatise PIA at the very least; only a fortnight ago, the national carrier announced that it had achieved break-even after years of losses and this fact might help in luring any potential buyers to the negotiating table for discussions of a handover. There are of course key factors to consider in privatisation such as what proportion of assets will be transferred as part of any attempt to privatise and what will be done with the excess staff that has been hired at both enterprises; but these issues should not deter the government in taking the difficult but necessary step of laying off a responsibility it cannot afford to take.

Of course, it still remains to be seen whether Mr Sheikh will succeed when his predecessors have tried and failed to privatise these loss-making public enterprises. The former PML-N government also aimed to privatise PIA initially but then gave up after its half-hearted attempts to do so were met with political opposition. Mr Sheikh however, hopefully has more political will to do so, and his experience in the past will help him expedite the process. Now that this announcement has been made, it can only be hoped that the government acts quickly and manages to do something many in the past have attempted to and failed.