Whenever a new government is formed, it starts making pledges to solve the problems of the underdogs of the nation through privatization. In this regard, the finance division of the PDM run government issued a report last year, titled “State-Owned Enterprises Triage: Reforms & Way Forward” with the aim of conducting a comprehensive review of the Government of Pakistan’s current state-owned enterprise (SOE) portfolio.
The report’s purpose was to identify which SOEs should be retained by the government and which should be privatized or liquidated. After a thorough review, it is mentioned that currently, around 212 SOEs are operating in various sectors of Pakistan with the
1: 85 commercial SOEs,
2: 44 Non-commercial SOEs (Section 42, not-for-profit entities as well as trusts, universities,
training institutions and welfare funds), and
3:83 subsidiaries of the commercial SOEs.
Similarly, the overall revenues of all the SOEs in 2018-19 was Rs. 4 trillion (approx.) while the book value of their assets was Rs. 19 trillion.
The revenues in 2018-19 were roughly 10% of nominal GDP. Additionally, SOEs employed more than 450,000 people which constitutes around 0.8% of the total workforce. Despite their crucial role in delivering essential public goods and services, the commercial SOEs recorded losses of Rs. 287 billion and 143 billion in years 2017 and 2018, respectively. Here, it must be noted that the profit of SOEs was Rs. 204 billion in 2013-14. What transpired subsequently to bring our institutions to the current situation?
Based on the report, it can be concluded that although state-owned enterprises (SOEs) play a crucial role in generating revenue, they are often privatized due to being seen as a burden on the national exchequer. Throwing away national resources instead of managing them is the result of poor governance and a lack of expertise.
Taking action against the privatization of state-owned enterprises (SOEs) is the need of the hour, as it is becoming increasingly clear that privatization alone is a panacea to our problems. I am assured that the employees will second such a decision but those people who are accustomed to washing hands in the Ganges will be uneasy.
Adv. Fida Hussain Wazir lives in
Green town and can be reached at email@example.com.