For the last few months, privatization has been a key component of economic news. The previous government, interim government, and now new government in office, all have underlined privatization as a top priority on economic agenda. The international financial institutions (IFIs) are also seeking a roadmap on privatization under their respective covenants.

Factually, privatization proceeds are an integral part of ‘non-tax revenue’ in annual budget presented before the parliament. The last big-ticket privatization was carried out in 2008. Cumulated privatization proceeds from 2008 to 2024 are a fraction of budgeted revenue.

It is imperative that we revisit our approach on this important element of economic manifestation. The Buyer-side dynamics have also changed drastically over these years. The big investors, particularly the sovereign funds with billions at their disposal, are far advanced in their approach and due diligence.

We have to level up our privatization approach to an extent that is mutually beneficial to the country as well as to the incoming investor. Mere pitching our loss-making entities without policy certainty, regulatory predictability and unaddressed encumbrances, will continue to make investors shy away after initial interest. Privatisation attempts for DISCOs, PSM, power plants and even real estate assets, all have identified a whirlpool syndrome, which has to end now.

For this we have to redefine our answers to four questions; (a) why we want to privatise, (b) what we want to privatise, (c) how we want to privatise, and (d) when do we want to privatise. With the privatisation lessons from progressive economies and the experience we have gained from our own successful and unsuccessful transactions, now we ought to be wise enough to answer these questions. Some key elements are discussed as under:

Why to privatise: PC Ordinance inter-alia refers purpose of privatization to use its proceed for retiring government debt and for poverty alleviation. Whereas stakeholders push to privatise loss-making entities due to their immense burden on national exchequer. Certainly, there is nothing wrong in both perspectives; however, the vision for privatisation in fast changing economic fundamentals cannot be too confined. Economies are crafting their privatisation agenda aligned with futuristic economic growth trajectory.

As seen, successful economies foremost identify the sectors they consider core to country’s long-term strategic trajectory, then evaluate their capacity gaps and in third step select the entities in those sectors for privatization. The first two steps are carried out jointly by finance and planning ministries, whereas third step is carried out jointly by the administrative ministry and privatization ministry for submission to cabinet or to the parliament, as per........

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