All state-owned firms to be privatised in Pakistan: PM

Pakistan will privatise all state-owned enterprises, with the exception of strategic entities, Prime Minister Shehbaz Sharif said on Tuesday, broadening its initial plans to sell only loss-making state firms to shore up its shaky finances.

The announcement came after Sharif headed a review meeting of the privatisation process of loss-making state enterprises (SOEs), according to a statement from his office, which discussed a roadmap for privatisation from 2024 to 2029.

"All of the state-owned enterprises will be privatised whether they are in profit or in losses," Sharif said, adding that offloading the SOEs will save taxpayers' money.

The statement didn't clarify which sectors would be deemed strategic and non-strategic.

The announcement came a day after an International Monetary Fund (IMF) mission opened talks in Islamabad for a new long-term Extended Fund Facility (EFF), following Pakistan's completion of a $3 billion standby arrangement last month, which had averted a sovereign debt default last summer.

Privatisation of loss-making SOEs has long been on the IMF's list of recommendations for Pakistan, which is struggling with a high fiscal shortfall and a huge external financing gap. Foreign exchange reserves are hardly enough to meet up to a couple of months of controlled imports.

The IMF says SOEs in Pakistan hold sizable assets

in comparison with most Middle East countries, at 44 per cent of GDP in 2019, yet their share of employment in the economy is relatively low. The Fund estimates almost half of the SOEs operated at a loss in 2019.

Islamabad has for years been pumping billions of dollars into cash-bleeding SOEs to keep them afloat, including one of the largest loss-making enterprises Pakistan International Airlines, which is in its final phase of being sold off, with a deadline later this week to seek expressions of interest from potential buyers.

The pre-qualification process for PIA's selloff will be completed by end-May, the privatisation ministry told Tuesday's meeting, adding discussions were under way to sell the airline-owned Roosevelt Hotel in New York.

Reuters