The challenge of loss-making SOEs

According to media reports, the government has announced that 15 State-Owned Enterprises (SOEs) accounted for 99.3 percent of cumulative losses during July-December FY2024. Frankly speaking, this information is not news per se in view of the fact that SOEs have been inflicting massive losses on the national exchequer for decades.

Successive governments are in fact the main culprit behind such slide because they have in fact promoted inefficiencies and corruption in these entities in order to serve their own political interests, primarily the vote bank. These governments themselves have shown either resistance or reluctance to privatise loss-making SOEs.

The incumbent government’s approach to the challenge of SOEs is not different from its predecessors’. In my view, we cannot arrive at any solution to the problem of loss-making SOEs because the government itself is a major part of the problem. Little or no progress with regard to government’s privatization plans says it all.

Khwaja Khurshid Shahid, Lahore

Copyright Business Recorder, 2024