Pakistan’s sovereign-owned enterprises (SOEs) are the Achilles’ heel of its economy, consistently delivering losses that amplify the nation’s fiscal distress. Fresh data underscores how these entities have morphed from assets into liabilities, demanding urgent intervention.
Breaking down the numbers, the report highlights a collective deficit surge of 20% year-on-year. Energy firms lead the pack, with distribution companies underwater by billions due to theft, inefficiencies, and subsidy dependence. Transportation sectors follow closely, where aging infrastructure and bureaucratic red tape stifle profitability.
The systemic rot runs deep. Political patronage inflates payrolls with ghost employees, while procurement scams drain treasuries. This not only burdens taxpayers but also deters foreign investment, as global partners view SOEs as high-risk propositions.
On the macroeconomic front, the strain is palpable. Public debt servicing now consumes over half the budget, leaving scant room for growth initiatives. Inflation at record highs erodes purchasing power, sparking social unrest. Rating agencies have downgraded Pakistan’s outlook, hiking borrowing costs.
Turning the tide requires radical steps. The report advocates a multi-pronged strategy: aggressive asset sales, digital transformation, and merit-based leadership. Early wins in telecom privatizations offer a blueprint. With elections looming and IMF talks critical, policymakers must prioritize SOE revival. Failure risks a full-blown default, plunging millions into poverty.