With a full year under its belt, the Pakistan Tehreek-i-Insaf government’s inability to decide whether or not to privatise major state companies is damaging the economy more than the government would like to admit. Contradictory claims of looking to run Pakistan Steel Mills (PSM) as a public entity or to Privatisation it using international companies was already confusing; there are now reports that the Prime Minister will be approaching the Chinese government for a state-level partnership to help PSM become a functioning business once more. This indecision is costing the economy – one has to look no further than the Pakistan International Airlines to see that the governments dilly-dallying on the issue will only bleed the national kitty dry.
The problem isn’t privatisation itself; successive governments have proven that they are unable or unwilling to steer these national assets out of the crisis. With overall accumulated losses of PSM now touching the Rs220 billion mark, it is obvious that the state does not have the funds to consistently bailout PSM when it fails to turn a profit. However, a state-level partnership with China will only be accepted if the government is not planning on handing all control and profit to the Chinese government, without anything to show for it for Pakistan.
Although China is our most trusted ally, self-interest dictates that any deal with the Chinese state does not lead to Pakistan handing over ownership of a state asset to a foreign government as this might lead to losing the ability to make decisions for PSM, not to mention the fact that it this may cause friction later – as the delay on CPEC is already causing. Although the Chinese state must be dealt with respect, failing to elaborate on the details of any agreement and not bring the public on board will only cause embarrassment later, as many might find fault in the government’s agreement, whatever it might be.
The government must get over its indecision and formulate one stable plan to deal with loss-making state assets. One year has already passed us by, with supposedly 20 state companies up for privatisation without any action taken. What is the government waiting for? Each day causes more losses and is a big part of why the state coffers are going dry. Action needs to be taken now, and the government must make its final decision, or else, much like the previous government, we will see empty promises of privatisation as a means to placate international lenders, without any real work done on this front.
(This news/article originally appeared in The Nation on October 7th, 2019)