THE failed attempt to privatise the national flag carrier late last month has led to a fierce debate around the government’s plans to sell not just PIA but also to disinvest other state-owned enterprises. In his testimony before a Senate panel recently, the privatisation minister sought to reassure people that the process of privatisation of the airline would soon be restarted from scratch. He also blamed a “flawed framework” developed by the previous caretaker set-up, where it left behind a Rs45bn negative equity on PIA’s balance sheet, for the failed attempt that had attracted just one bid of Rs10bn for a 60pc stake in the national flag carrier against the minimum bid price of Rs85bn. However, his assurance to again initiate the process does not inspire much confidence in the government’s commitment to privatise the SOEs in spite of their increasing burden on its budget. This scepticism is not without good reason.

In hindsight, many see the botched PIA privatisation attempt as something the government went ahead with, despite clear indications that the investors had lost their appetite for the deal offered to them, thus lowering expectations that this administration is serious about reducing the state’s footprint on the economy. It is well known that the prime minister is not big on the idea of a leaner and smarter government. Nor are some other influential PML-N politicians in his cabinet or the bureaucrats close to him. While he has repeatedly promised to sell off state-owned businesses, abolish redundant federal ministries and departments, and slash the huge army of government employees to cut wasteful public sector expenditures as demanded by the IMF and other multilateral agencies to control the runaway fiscal deficit, not much has been done to pursue these goals. For example, little progress has been made on the privatisation front barring the (botched) PIA attempt, which its critics allege, had to be taken to its logical end due to the extensive work already done on it by the caretakers. The same is the case with the plans to cut the size of government. Like any party in power, the PML-N has every right to pursue policies it sees as beneficial to the country but, at the same time, it must also be cognisant of the high price that the people are paying to finance a large, dysfunctional administration and loss-making state businesses.

Published in Dawn, November 20th, 2024