Selling SOEs

Recently, the Finance Minister announced that the government was amending the laws to enable the sale of shares of profit-making State Owned Enterprises (SOEs) with a buy-back option to friendly countries on a government-to-government basis (G2G). The Finance Minister is trumpeting that billions of dollars would be generated through the sale of SOEs, and to smooth the sale processes the government is preparing ordinances to immediately sell all the state’s prized possessions. However, the irony is that the billions generated would be used for trying to secure the $1.2 billion IMF loan (pun intended). In other words, we are selling off profit-making SOEs—providing thousands of jobs to common folk and giving revenues to the government for a mere 1.2 billion IMF loan, for which there is no guarantee yet. Since the present government came into power, it has escalated power, gas, and petrol prices numerous times for the supposedly securing elusive 1.2 billion IMF tranche. But these measures have only fuelled inflation, adding further misery to the life of ordinary citizens.
To hoodwink the public, the government is stating that it is selling the SOEs with the buy-back option, which is hyperbole in itself. The Finance Minister has not laid any plans as to how and when we will be able to generate billions of dollars to buy these doled-out SOEs back and at what prices—at the prices sold or at the prices prevailing at the time of buying back and who will decide these buying-back prices. The PML-N stints in the government are famous for their privatisation campaigns, whilst PPP is famous for staffing the SOEs. And the policies of both political parties have spelt disaster for Pakistan’s economy. Overstaffing in PIA, Railways, Steel mills and other entities has made them inefficient and haemorrhaging the national exchequer. But PPP justifies that it provides jobs—at the state’s and people’s expense. On the other hand, PML-N privatised banks, cement plants, and other state entities in a questionable manner and at questionable prices; and this privatisation only resulted in cartelisation in the country. The Competition Commission of Pakistan (CCP) meant to protect consumers’ interests is a toothless company headed by a government-appointed executive, and so far CCP has failed to protect the interests of consumers at the hands of these cartels. Thus, in either case, people are the main sufferers of cartelisation and overstaffing in SOEs. Therefore, what is the guarantee that people will not be facing additional cartels as more SOEs are sold?
Finally, the IMF does not ask any country to impose new taxes and burden its people but asks them to do structural adjustments to remove inefficiencies that have led to seeking loans from the lending agency. Structural reforms, among others, include reducing bloated bureaucracy, improving government efficiency, and reducing perks and privileges. On the contrary, the present and previous governments have continued with a bloated bureaucracy, cabinet sizes that belie common sense, and perks and privileges that the President of the USA would probably envy. Thus selling SOEs, putting more taxes on the ordinary masses is no panacea for the economic mess which is the creation of our ruling elite and who is still bent upon securing power for themselves and their offspring instead of agreeing on some agenda for improving the plight of ordinary masses, who, unfortunately, always vote them into power.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More