The PTI government appears to be deeply concerned about the role of SOEs that are causing a huge burden on country's economy. That is why the adviser to PM on finance Dr Abdul Hafeez Sheikh has underscored the need for taking the required steps aimed at containing the losses incurred by a large number of public sector entities. But the question is: Who is stopping him from taking the remedial steps?
As indicated by Dr Omer Javed in his yesterday's op-ed "Reforming SOEs in Pakistan" the government would be required to come up with some 'creative' solutions. Here, I fully agree Dr Javed's prescription that "Reforming SOEs should also mean opening it to private investors; with limits on such invitation depending on the extent of strategic nature of a particular SOE. For example, the PSC rules should be amended to include transforming SOEs into joint-stock companies of the nature of limited liabilities, so that investors are firstly given space to invest, and secondly only face the risk to the extent they have invested. At the same time, as the country improves the underlying markets of these SOEs, it should even look to move as many SOEs as possible to a Mixed-Ownership Enterprises (MOEs) framework, something which China has undertaken as an effort to bring dynamism to its policy of SOE transformation, which allows greater private sector participation, and builds further upon the limited liability framework."