Selling national assets, what’s next?
It is no longer a hidden secret that the country is on the verge of default as the economy falters due to the continued devaluation of the Pakistani Rupee as the Pakistan Stock Exchange takes a nosedive. Surprisingly, the government found a cure for the crisis by giving its approval to the Intergovernmental Commercial Transactions Order 2022, allowing the sale of national assets while circumventing all procedural and legal checks. According to reports, the passage of the order will allow the government to sell stakes in oil and gas companies and government-owned power plants in the United Arab Emirates to raise $2-2.5 billion to avoid the impending default.
Undoubtedly, the movement is debatable. While the government may have genuine reasons for taking such a bold step, any legislation dealing directly with national affairs requires careful consideration. Any deal will become shoddy if it fails to meet established criteria or is exempt from all checks and balances. Apparently, the order resembles the East India Company through which the then British Empire penetrated the financial markets of the subcontinent and later usurped all of its assets. Instead of involving foreign actors to improve the performance of national entities, the government itself must take over institutions to ensure maximum profit and reverse financial instability. The real concern with loss issues should be addressed instead of putting them up for sale. Large-scale integration of personnel on political grounds and poor management are cited as the main reasons for the miserable situation of state organizations.
The logic behind the government’s drive to sell off state-owned and run industries and institutions is to overcome the economic crisis when foreign exchange reserves have been depleted to a dangerous level and there is a cash flow problem as friendly countries refused to respond to Pakistan’s request for more loans. However, the solution to this problem does not lie in the sale of all public enterprises, but in improving the efficiency of the management and operation of these organizations by hiring competent professional managers and introducing policy changes. .
Another terrible aspect of the development is that the government has not made public the full contents of the order, which would empower the federal cabinet to make all decisions on its own without being answerable to any other authority, which means that any wrongdoing committed by an individual cannot be punished due to the special immunity granted to those who would make key decisions in such transactions. Such decisions can only be made in a banana republic. A lack of transparency is evident in the legislation which has not been signed by the president while a debate is still ongoing in parliament.
It is a pity that when other states are focusing on increasing their business activities, Pakistan is trying to meet the economic challenge by putting its strategic assets up for sale. Government officials talk about China’s economic progress but fail to emulate their neighbor. The government must overhaul the basic infrastructure of its organizations and purge them one by one of all anomalies. Even if the government wants to sell these national institutions, an appropriate mechanism must be followed to make the transactions transparent. The Pakistani Muslim League-Nawaz (PML-N) government has a reputation for business-oriented leadership and it is now up to the incumbents to apply their financial acumen and turn these organizations into profitable entities. .