AS part of the plan to avoid a default and generate resources to run affairs of the state, the Federal Cabinet has approved an ordinance for emergency sale of state assets to foreign countries bypassing procedures and relevant laws.
The plan envisages sale of stakes of oil and gas companies and government-owned power plants to the UAE to raise $2 billion to $2.5 billion to avoid the looming default.
This is in furtherance of the privatization agenda that almost all successive governments followed to raise money to meet budgetary deficit but what makes the latest move different is the fact that all this would be done bypassing procedures and laws and no court can take cognizance of such deals.
This would raise issues concerning transparency of the deals and make them controversial.
We also have a bitter experience of selling highly profitable PTCL to a foreign company as the country has still not realized full proceeds of the transaction despite passage of about 17 years.
The worries of the government were understandable and these were highlighted by remarks of Finance Minister Miftah Ismail who said recently that it usually took 471 days to complete one privatization transaction and, therefore, the government had to conclude deals with foreign countries in days to urgently raise funds.
It is also important to note that the International Monetary Fund (IMF) has placed a condition that Pakistan’s case could not be taken to the Board until it arranged $4 billion from friendly countries to bridge the financing gap.
The ordinance is dubbed by the government as a mechanism to carry out a commercial transaction under an inter-governmental framework agreement to promote, attract and encourage foreign states to have economic and business relations with Pakistan.
No doubt, the government-to-government deals have more credibility than ordinary transactions under privatization programme but there is dire need to ensure transparency so that the sale of these assets generates maximum resources for the cash-starved country and there is no harm to the bilateral relationship due to internal politics as we witnessed in the past.