Moaaz Manzoor

While the government has moved a step closer to finalizing the privatization of key national assets, including the loss-making Roosevelt Hotel and PIA, experts emphasize internal reforms for effective private investment, reports WealthPK.

At a July 14 meeting, the Privatization Commission informed the National Assembly’s Standing Committee that four parties had advanced to the acquisition phase for the airline. Meanwhile, expressions of interest (EOIs) for New York’s Roosevelt Hotel are expected in August. While these developments signal the revival of the stalled privatization process, economists caution against viewing these transactions as a substitute for broader reform.

Speaking to WealthPK, Dr. Nasir Iqbal, Head of the MacroPolicy Lab at the Pakistan Institute of Development Economics (PIDE), acknowledged the government’s forward movement but noted that public sector inefficiencies posed a deeper challenge. “These are deep-rooted issues that cannot be solved in the short term,” he said. Dr. Nasir emphasized that long-standing problems such as overstaffing, administrative inertia, and weak internal controls have historically undermined the reform efforts.

“The government must focus on eliminating avoidable fiscal losses to fix structural inefficiencies,” he said, adding that while privatization may provide temporary relief, its lasting impact hinges on tackling deep-rooted institutional shortcomings. The government has already reduced the airline’s workforce from 11,000 to 6,000 and signaled a three-to-five-year employment guarantee for remaining employees, an attempt to balance reform with political sensitivities.

Dr. Nasir suggested an operational rethink even before the privatization process concludes. “What the government can do now is halt new employment and redirect  existing staff to ease prressure on key ministries,” he advised. Beyond aviation, other public sector areas, such as Pakistan Postal Life Insurance, continue to be plagued by delayed disbursements and weak fiscal management.

Committee members raised concerns about over Rs6 billion in pending insurance claims, further underlining the broader dysfunction across state institutions.  In this context, experts argue that unless governance frameworks and institutional efficiency improve in tandem with divestment efforts, privatization risks becoming a short-term fix instead of a sustainable reform strategy.

Credit: INP-WealthPk