Pakistan brings ordinance allowing government to sell state assets to foreign nations

To prevent the country from tumbling into a total crisis of defaulting on loans, the Pakistan cabinet on Thursday issued an ordinance named Inter-Governmental Commercial Transactions Ordinance 2022, that will allow Prime Minister Shehbaz Sharif’s government to sell state assets to foreign entities and governments without any checks.

Reportedly, the state will not be liable to follow any procedure and the regulators will not be allowed to keep tabs on the government’s ‘selling’ business. Such is the overarching range of power under the ordinance that no one can challenge the government’s decisionin the courts or in front of any investigation agencies. However, a final hurdle remains as President Arif Alvi is yet to sign the dotted lines of the ordinance.

The ordinance has been brought in mainly to sell stakes of oil and gas companies to the UAE. Pakistan Petroleum Limited, Oil Gas Development Company Limited and Mari Gas Company are some of the companies on the radar of the government to be sold to foreign companies.

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Reportedly, in May, UAE had outrightly refused to lend Pakistan cash deposits after Islamabad failed to repay the loans.

At the time, UAE had instructed Pakistan to open its companies for investment from the West Asian country. By selling the stakes to UAE, Pakistan is expected to raise anywhere close to $2 billion to $2.5 billion, which may help it avoid default.

Imran Khan speaks against the ordinance

While the Pakistan government is gearing full steam for the sale of assets, former Prime Minister Imran Khan, who received a booster shot of confidence in the just-concluded bypolls, took to Twitter to slam the ‘imported’US government.

“How can Imported govt brought to power through US conspiracy, led by Crime Minister, who‘s family along with Zardari have volumes written on their corruption, be trusted with sale of national assets & that too thru bypassing all procedural & legal checks,” tweeted Imran.

IMF to help Pakistan, subject to few pre-conditions

The cash-strapped country has been going through its worst financial crisis in recent times and needs cash liquidity on an almost urgent basis. The Pakistan rupee has fallen 8.3 per cent this week alone, which is being dubbed the steepest fall since 1998.

According to several estimates, the neighbouring country of India needs at least $41 billion in the next 12 months to fund debt repayments and boost foreign exchange reserves.

Standing on the verge of bankruptcy, Pakistan, however, was given a glimmer of hope earlier this month when the International Monetary Fund (IMF) decided to resume a 2019 signed $6 billion loan programme.

However, IMF has kept a few pre-conditions before it opens the coffers to bail out the country. Reportedly, Pakistan will have to raise $4 billion from friendly countries to receive the next tranche of payment.

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Moreover, in an attempt to secure the deal, the Shehbaz Sharif government has already removed all subsidies on fuels to broaden the tax base. Ever since coming to power, Shehbaz has cumulatively hiked the price of fuel in the country by 50 per cent whilst also raising the cost of electricity.

(With inputs from agencies)

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