The International Monetary Fund (IMF) has stated that Pakistan must continue to keep all state-owned enterprises (SOEs) under the oversight of the finance ministry as part of the reform process agreed upon by the government. This move is crucial in attracting foreign investment and ensuring long-term economic stability, according to the IMF’s representative in Pakistan, Esther Perez Ruiz.
Pakistan has been actively discussing the outsourcing of operations for several of its state-owned assets to external companies. One such initiative began in March, where the operations and land assets of three major airports were outsourced through a public-private partnership. This move aimed to generate foreign exchange reserves to support the country’s struggling economy.
In June, the IMF and Pakistan reached a staff-level agreement on a $3 billion stand-by arrangement (SBA), which has been eagerly awaited by the country, as it was on the verge of defaulting on its financial obligations. Perez Ruiz mentioned that it was still premature to discuss future plans after the current SBA, which is set to run until early 2024.
The focus of the SBA is centered around the implementation of the fiscal year 2024 budget, which aims to facilitate Pakistan’s necessary fiscal adjustment, ensure debt sustainability, and safeguard critical social spending. It also prioritizes returning to a market-determined exchange rate, promoting proper functioning of the foreign exchange market to absorb external shocks and eliminate foreign exchange shortages. Moreover, it emphasizes maintaining tight monetary policy to counter inflation and making further progress on structural reforms, particularly in the energy sector’s viability, state-owned enterprise governance, and climate resilience.
By keeping SOEs under the finance ministry’s oversight, Pakistan can enhance transparency, accountability, and efficiency in their operations. This will inspire confidence among potential foreign investors and contribute to the country’s economic growth and stability.