Issue Brief on “Privatization of State-Owned Enterprises (SOES) and its Implications for Pakistan”

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State-owned enterprises (SOEs) caused a colossal loss of Rs. 692 billion since 2017 to the national exchequer due to lack of reforms in these enterprises along with mismanagement and bad governance. The Government of Pakistan has embarked on a fresh program of privatization of state-owned enterprises (SOEs) and properties for reducing public sector debts and fiscal deficits. It is expected that the privatization process will increase the efficiency of all economic sectors by invoking private sector’s technical competence.

The government is working to complete the privatization of four to five public sector entities (PSEs) during current fiscal year 2021. There are 19 PSEs on the active list for privatization including Pakistan Steel Mills (PSM) and Pakistan International Airlines owned Roosevelt Hotel in New York.[1] The Finance Bill for the FY 2020-21 has incorporated Rs. 100 billion privatization proceeds as part of the ‘Non-Tax Revenue Receipts’ for the FY 2020-21.[2] Unsustainable budget deficits, high taxation, and burdensome funding are common factors precipitating the need to privatize. The justification for privatization therefore is driven by the need to improve efficiency.

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