In a desperate move to avert default, Pakistani govt approves ordinance to sell state assets

11:45 PM | 23 Jul, 2022
In a desperate move to avert default, Pakistani govt approves ordinance to sell state assets
Source: Press Information Department (PID)

ISLAMABAD – The incumbent Pakistani government has approved an ordinance to bypass all procedures involved in the sale of state assets and abolished the regulatory checks.

The move is being seen as a desperate attempt to save the country from default through emergency sale of state’s assets to foreign countries.

Through the Inter-Governmental Commercial Transactions Ordinance 2022, the Centre has empowered itself to issue binding instructions to the provincial governments for land acquisition, according to a copy of the ordinance.

President Arif Alvi has not signed the ordinance yet.

Through the ordinance, the coalition government led by Prime Minister Shehbaz Sharif has barred the courts of the country from entertaining any petition against the sale of assets and shares of the government companies to foreign countries.

The federal cabinet approved the ordinance on Thursday to sell stakes in oil and gas companies and government-owned power plants to the UAE to raise $2 billion to $2.5 billion to avoid the looming default.

The UAE had in May refused to give cash deposits due to Pakistan's failure to return previous loans and instead asked to open its companies for investment.

Pakistani Finance Minister Miftah Ismail said this week that it usually took 471 days to complete one privatisation transaction. He had added that the government had to conclude deals with foreign countries in days to urgently raise funds.

The International Monetary Fund (IMF) has placed a condition that Pakistan’s case could not be taken to the board until it arranged $4 billion from friendly countries to bridge the financing gap.

The federal law minister had not provided the reason for the purpose of this article.

Pakistan’s rupee shed 8.3% of its value this week -- the steepest since November 1998, indicating the gravity of the challenges that the government is facing.

However, the ordinance has raised many transparency concerns, including the determination of the prices of the shares of the Mari Gas Company, Oil Gas Development Company Limited and Pakistan Petroleum Limited amid their low market price compared with their book values.