As cash-strapped Pakistan gets ready for talks with the International Monetary Fund for a fresh bailout package, Finance Minister Muhammad Aurangzeb on Sunday said that privatisation is necessary to achieve economic stability in the country.
"You have to move towards privatisation if you want economic stability in the country," Aurangzeb said while speaking at the Pre-Budget Conference 2024-25.
As cash-strapped Pakistan gets ready for talks with the International Monetary Fund for a fresh bailout package, Finance Minister Muhammad Aurangzeb on Sunday said that privatisation is necessary to achieve economic stability in the country.
"You have to move towards privatisation if you want economic stability in the country," Aurangzeb said while speaking at the Pre-Budget Conference 2024-25 here.
Commenting on the fresh loan programme with the IMF, the finance minister said a larger and longer programme was needed to bring “permanence in macroeconomic stability and structural reforms”, the Dawn newspaper reported.
His remarks come as Prime Minister Shehbaz Sharif-led government has pushed for the privatisation of several state-owned enterprises (SOEs) to tackle the burden on the exchequer and the prevailing financial crunch, Geo News reported.
Aurangzeb stressed that the private sector has been brought on board with the government and underscored improved economic indicators, including the reduced current account deficit of less than USD 1 billion, and a decrease in inflation coupled with “all-time high” stock exchange levels, the report said.
The finance minister called on businessmen to come into the tax net and revealed that around Pakistani rupees 8 to 10 trillion cash is currently in circulation in the country.
He reassured businessmen that the government will provide all kinds of facilities and reiterated that the authorities will not back down from their stance on the issue of broadening the tax net.
"People think that if they come in the tax net, they will be harassed for no reason [however, that's not the case as] we will provide facilities, negotiate but will not go back from the track," he was quoted as saying.
Aurangzeb also said that there was “so such thing” as strategic-owned enterprises, the Dawn newspaper reported.
His remarks assume significance as just two days ago Deputy Prime Minister Ishaq Dar said the government would limit its business only to strategic and essential SOEs under its domain and their number would be reduced from 40 after scrutiny.
Aurangzeb said that a meeting would be held tomorrow where “we will go back to various ministries and say that all this should be handed over to the private sector”, the Dawn reported.
“There will be a public-private partnership and we will accelerate the privatisation agenda,” he added.
On the question about concerns regarding the privatisation of the national carrier Pakistan International Airlines, he said the government was not just looking at foreign investors.
“They are local and foreign investors who are bidding […] there is no such thing that we are only looking at foreign investors,” he said.
Meanwhile, the IMF has said that Pakistan faces major debt-repayment challenges and expressed serious doubts over the cash-strapped country's capacity to repay the global lender.
The Washington-based bank's assessment of Pakistan's economy came as an IMF support team reached the country on Friday to hold talks with officials here after Islamabad requested a fresh bailout package under the Extended Fund Facility (EFF).
"Pakistan’s capacity to repay the fund is subject to significant risks and remains critically dependent on policy implementation and timely external financing,” Geo News reported, citing the Washington-based lender as saying in its staff report issued earlier this month on Pakistan.