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ISLAMABAD, Nov 27 (APP):Advisor to the Prime Minister on Privatization and Chairman of the Privatization Commission Muhammad Ali on Thursday stressed the need to curtail the government’s footprint in non-strategic sectors to restore competition, merit and economic efficiency.
Addressing a session titled “Privatization and Private Sector Participation” on second day of the Pakistan Business Council’s Dialogue on the Economy (DoE), Ali said the fiscal burden of loss-making entities was only one dimension of the problem, noting that the government continued to fund these losses from limited fiscal space.
The session, moderated by Security and Exchange Commission of Pakistan (SECP) Executive Director Mussarat Jabeen, was participated by Founder of Arif Habib Group, Arif Habib, CEO and MD of Pakistan Stock Exchange (PSX) Farrukh H. Sabzwari and IFC Principal Country officer Naz Khan.
The advisor said that beyond the fiscal impact, the country was “avoiding competition,” warning that the government’s “large footprint in so many industries” had eroded market discipline and stifled private-sector growth.
Ali argued that decades of ministerial control over State Owned Enterprises (SOEs) had contributed to a culture where personal connections supersede talent. Frequent turnover in bureaucracy and political leadership, he said, reinforced these patterns.
“We have developed a society which is based on who you know, rather than what you know,” Ali remarked, adding “Over time, we have moved away from merit — and that has led to brain drain.”
He pointed to Pakistan International Airlines (PIA) as an example of chronic mismanagement, saying the airline remained overstaffed despite multiple rounds of workforce reductions.
“These hiring decisions were made by someone. What was the motivation? Why were they allowed to do it? Is there any accountability?” he asked, noting that losses of “a thousand-plus billion rupees” occur annually across SOEs with no individual responsibility assigned.
Ali said meaningful economic reform required shifting decision-making to those whose capital is at risk.
“If we really want to grow, we need a model in which people whose money is at stake are the ones taking decisions,” he said, adding that the government must “get out of sectors that are not strategic.”
Outlining the privatization roadmap, Ali said the cabinet had previously defined the criteria that any entity not deemed strategic should be privatized.
Currently, 24 entities are on the active list, Ali said and added that the Commission aimed to complete a few major transactions before recommending the addition of more.
He said the three major airports including Karachi, Lahore and Islamabad have been added to the privatization program, but the government would not be selling them. “We will be giving them for long-term concession because the service delivery at the airports is not very good. We are doing that,” he said.
“We want to deliver first, and then move forward,” Ali added.
Meanwhile, Chief Executive Officer (CEO) and Managing Director PSX Farrukh H. Sabzwari appreciated the PBC for hosting an “excellent conference,” noting that privatization must be viewed as a structured transition from public to private management.
He said the shift required stronger governance, reduced subsidies, professional management and minimal political interference—conditions that have proven essential in successful privatization programs.
He stressed that Pakistan must similarly use its capital markets to support this transition, allowing the PSX to play a central role in financing and executing privatization.
The MD said that for decades Pakistan’s capital market “did not have a seat at the table,” limiting its ability to drive capital formation or support privatization transactions.
IFC Principal Country Officer Naz Khan said the private sector’s importance stems not only from its ability to attract investment and generate wealth but also from its inherent drive for innovation and efficiency.
Unlike the public sector, which is primarily focused on service delivery and social welfare, the private sector’s profit motive pushes firms to compete, optimize and innovate — qualities, she said.
To succeed, she said, governments must prepare thoroughly, start with easier transactions to build credibility, and establish a strong regulatory framework upfront.
Clear rules, rational pricing expectations, realistic timelines and transparent, competitive bidding processes are critical to attracting serious investors.