EDITORIAL: Raising the privatisation debate from the dead just to meet an IMF (International Monetary Fund) deadline is hardly any way to ensure success. But watching PTI (Pakistan Tehreek-e-Insaf) scramble for old-fashioned fire sale of the family silver is not without irony, considering how the party has moved its own goalpost many times when it comes to SOEs (State-Owned Enterprises). First, when it was still in opposition and the previous government wanted to win some brownie points by getting rid of the worst loss-making enterprises, PTI's press conferences tended to enlighten the state and the people about how restructuring state enterprises was a much better idea than putting them up for sale. It also promised, time and time again, to just that when it came to power. But then, when it did come to power, the party's first finance minister, Asad Umar, came up with a novelty about some holding company that would isolate bad debts of all SOEs before giving them to the market.
Then, somewhere on the way they also mulled turning parts of SOEs over to the private sector, to improve efficiency and all that, before abandoning the whole thing and deciding to blame previous governments for all the problems. But now that the Fund counts privatisation among the things it wants in return for its bailout money, everybody all the way up to the prime minister is back to issuing the same strong statements in favour of it, especially when it comes to loss-making entities. Economically and financially, it makes a lot of sense to put a price tag on state enterprises, not the least because the government has no business running them, but the context in which it is being done in a hurry right now gives some cause for worry. Because now Islamabad is desperate for IMF's money and since there's just not enough time to restructure and put a realistic price tag on SOEs, it would have to rush the entire process through just to plug the widening hole in its revenue stream.
There's a good reason that no government over the last 20 years or so has been able to do much about the privatisation business, no matter how loudly they cried about it. And that reason is that the SOEs in question are perhaps the most politicised entities in this country. And while removing all the politically appointed personnel in one fell swoop might not be the worst idea at the end of the day, it does run into legal complications that no administration has yet had the stomach for. That is why different kinds of expectations were attached with PTI, considering its tall claims on the campaign trail if nothing else. But if they have hardly moved forward on the matter at all in more than three years, there's really nothing to suggest that they can do a clean job of it in the little time that remains before the next election.
Yet since a start has to be made at some point, and we are pushed against the wall at the moment, the government would have to put its best foot forward and get on with it. This will, of course, put the government to a very stern test; and not too many people are very optimistic about the kind of results that can be expected. It would be a shame for the process to begin in the wrong manner, especially since the debate of how to go about it has been lingering since forever. For better or worse, though, the spotlight is squarely on the privatisation ministry and the PM office as they prepare to shove this bitter pill down the entire nation's throats; since the manner in which this is done and the results will affect everybody. There must also, just for good measure, be some word on a contingency plan in case this deadline cannot be met; which is very, very likely. If this is high enough on the IMF's priority list to pull the plug if it fails, then there could and most likely will be a lot more trauma down the road. A little clarity then, about how the government will go about it and also about the fallback plan if one is needed, would be appreciated.
Copyright Business Recorder, 2021
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