PRIVATISATION, liberalisation, decentralisation, restructuring and deregulation are buzz words of today’s global economy. There are rising trends to restrict interventions by the governments in economic affairs to certain strategic industries.

At present, there are about 1,500 state-owned multinationals all over the world having 86,000 subsidiaries which contribute roughly $8.483 trillion to the global GDP of $84.835 trillion.

There are about 200 state-owned enterprises (SOEs) in Pakistan engaged in all important sectors of the economy having total assets base of more than Rs1,150 billion. The only visible contribution these SOEs make to the Pakistan’s economy is employment of 0.5 million people at a staggering loss of about 400 billion rupees to the national exchange per annum.

Their proverbial mismanagement and operational inefficiencies have touched unimaginable heights. They have caused an accumulated loss of more than Rs1,600 billion to the national exchequer in the shape of subsidies, bailout package and financial assistance.

They have virtually become economic dinosaurs, eating away precious economic resources of the country, which could be utilised for some useful economic purposes. Problem has been compounded with multiplicity of controls of these SOEs by ministerial supervision, parliamentary oversight, judicial scrutiny, frequent political interventions, excessive peeping by the media and intrusions by anti-corruption watchdogs such as NAB, FIA and ACE.

Every government dreams to generate additional revenues but has failed miserably. One way to generate more revenue is to overcome losses being caused by SOEs. It may be understood that all SOEs are not causing losses. There are also profit-making SOEs such as PSO, NBP, NIDCL, Gepco, Wapda, Parco etc.

However, the crux of the matter is how to get rid of huge recurring financial losses being caused by our loss-making SOEs. One view is ‘it is not the business of the state to be in business’. So all SOEs with the exception of a few strategic ones should be divested.

Muhammad Nadeem Butt

Director, National Vocational & Technical Training Commission, PM’s Office

Islamabad

Published in Dawn, June 19th, 2019