Offload all loss-making SOEs within 12 month on war footing, new PBC Chairman urges

PBC Chairman Ziad Bashir has urged the government to swiftly offload all loss-making state-owned enterprises (SOEs) within a 12-month timeframe, stating that the current pace of privatisation is too slow. Speaking to Business Recorder, Bashir, who recently took up the position at the PBC, emphasized the need for accelerated action, calling for the process to be carried out "on a war footing at high speed."

He highlighted that SOEs drain the national budget of billions of dollars annually in losses, and each delay in offloading these entities can result in additional financial losses. Bashir praised last year's privatisation of Pakistan International Airlines (PIA), which was bought by an Arif Habib-led consortium for Rs135 billion, noting that capable business groups should continue taking over SOEs to revitalize them.

Bashir identified export growth as his top priority, linking Pakistan's economic fluctuations to structural imbalances caused by faster import growth compared to export growth. He stressed the importance of increasing exports, reforming the tax system, and reducing SOE losses simultaneously. The PBC chairman criticized the current tax system as "completely broken" and called for expanding the tax base and documenting undeclared segments of the economy.

He also pointed out that the retail sector contributes only 1% of total taxation despite accounting for 18% of GDP, and urged bringing more retailers into the tax net. Additionally, Bashir noted that high energy costs are hindering economic growth, as expensive electricity encourages productive consumers to disconnect from the national grid.

He emphasized the need for the government to engage with the IMF to address these issues, as Pakistan is currently under a $7 billion IMF Extended Fund Facility (EFF) program focusing on monetary and fiscal policy credibility, public finance strengthening, price stability, and structural reforms.