KARACHI: The Pakistan Peoples Party (PPP), one of the coalition partners in the Pakistani government, on Monday said it would resist privatization of the country’s national airline and other state entities regardless of its potential impact on the government’s talks with the International Monetary Fund (IMF) this month for a new bailout program.
Pakistan last month completed a short-term, $3 billion IMF program, which helped stave off a sovereign default, but the government of Prime Minister Shehbaz Sharif has stressed the need for a fresh, longer-term program.
An IMF mission is expected to visit Pakistan in the mid of May to discuss the upcoming budget, policies and reforms under a potential new program. Pakistan’s financial year runs from July to June and its budget for fiscal year 2025, the first by Sharif’s new government, has to be presented before June 30.
Pakistan’s Finance Minister Muhammad Aurangzeb on Monday said he was hopeful that the Pakistan International Airlines (PIA) and other privatization deals would get through the “finishing line” by early July.
“The IMF is not in our ten points, IMF is not part of our manifesto,” said Senator Taj Haider, a senior PPP figure, when asked if his party had assessed repercussions of its opposition to the government’s privatization move.
“Those who are the slaves of the IMF should be worried. We must stand on our own feet and not look toward the outsiders.”
The PPP, whose co-chairman Asif Ali Zardari is currently serving as the president of Pakistan, has formed a three-member committee to engage with the government on privatization issues.
Haider said his party had already offered the government to hand over the Pakistan Steel Mills to the Sindh government which had the capacity to run it, while the PIA should be run through public-private partnership (PPP).
“Government entities, including the PIA and the Steel Mills, should not be privatized because they will sell their valuable properties and won’t make them sustainable like we have witnessed in the past,” he said.
“No privatization has been successful, and no public-private partnership (PPP) has been unsuccessful.”
In the past, Haider said, privatization drives remained unsuccessful because the process had only been aimed at selling state properties.
“The PIA’s problem is an outcome of mismanagement,” he said. “If other airlines are making profit, then why PIA cannot do it.”
Speaking at a conference in Islamabad on Monday, Finance Minister Aurangzeb outlined reforms under a new IMF deal, saying the government had to broaden its tax base and increase the tax-to-GDP ratio.
“And the third one is the SOE [state-owned enterprises] reform,” Aurangzeb said. “Our prime minister has been very clear that the government has no business being in business … We need to and we will accelerate the privatization agenda.”
Hidayatullah Khan, president of a union of PIA employees, lamented that private airlines had been given several domestic routes of the PIA, while the aircraft of the national airline were left standing.
“If PIA is not making profit, it’s an issue of the management, whose policies have destroyed the airline,” Khan said, adding the airline employees would stage protests in Karachi and Islamabad to stop the privatization of the airline.
Ali Khizar, an Islamabad-based financial and development consultant, said the privatization of the PIA was not the “primary concern” of the IMF.
“IMF has advocated for the privatization, including that of PIA, for quite some time, but its primary concerns are increasing taxation and reducing duplicated expenditures,” Khizar told Arab News.
“While privatization won’t greatly affect talks with the IMF, I believe PIA should indeed be privatized.”
Last week, Pakistan pushed back the deadline for companies to express interest in buying PIA to May 18, a day before the expressions had originally been due. The privatization commission says 10 companies have already expressed an interest.
Pakistan’s government has previously said it was putting on the block a stake of between 51 percent and 100 percent in the loss-making airline.
The disposal of the flag carrier is a step that past elected governments have steered away from as it is likely to be highly unpopular, but progress on privatization is key to helping cash-strapped Pakistan pursue further funding talks with the IMF.
