Pakistan cabinet approves order to sell government assets to repay loans

On July 21, in what is seen as a desperate move, Pakistan’s cabinet under Prime Minister Shehbaz Sharif approved an order titled Governmental Commercial Transactions Ordinance 2022 to circumvent all procedures for selling government assets to foreign countries. The measure was taken to prevent the country from defaulting on its loans. Pakistani President Arif Alvi has yet to sign the order.

Reports suggest that the ordinance would also allow the government to ignore regulatory controls including six relevant statutes named Companies Act, 2017, Privatization Commission Ordinance, 2000, Public Procurement Regulatory Authority Ordinance, 2002, Public-Private Partnership Authority Act, 2017, Securities and Exchange Commission of Pakistan Act, 1997, Securities Act, 2015 or any other law to approve the sale.

The Express Tribune reported that with this order, the government could sell the land for the two LNG power plants to a foreign country. Machines installed in factories will be included in the sale. Through this ordinance, the government will be empowered to issue binding instructions to provincial governments for the acquisition of land. The order also barred the courts from considering any claims against the sale of government assets, including land, companies, etc., to foreign countries.

The government plans to sell stakes in oil and gas companies as well as government-owned power plants in the United Arab Emirates. This will help Pakistan raise between $2 billion and $2.5 billion. Notably, in May, the United Arab Emirates refused to provide cash deposits to Islamabad because the country had failed to repay previous loans. Instead, Pakistan asked the UAE to establish its companies for investment.

In addition, the International Monetary Fund (IMF) has also imposed on the neighboring country the condition that its case will only be taken over by the board of directors if Pakistan manages to raise 4 dollars from friendly countries. Meanwhile, the value of the Pakistani rupee is falling at a stagnant rate. Last week it fell 8.3%, the biggest drop since November 1998.

The Express Tribune further added that a Cabinet Committee on Intergovernmental Business Transactions would be formed once the order is passed. With the ordinance, the government will have immense power to control land anywhere in the country and sell it to a foreign state. Neither the court nor any investigative body will be able to challenge the sale. However, according to Pakistani experts, the court will not accept such clauses.

According to reports, these conditions and the price discovery mechanism to be used in accordance with the order will cause controversy as there will be a lack of transparency.

Imran Khan opposed the order

Former Prime Minister Imran Khan has raised serious objections to the order. As reports of the order passed by Pakistan’s cabinet broke, the former prime minister took to Twitter and lashed out at the government.

Calling the current regime an “imported government”, he said: “How can an imported government be brought to power through an American conspiracy, led by the crime minister, who is related to (the PPP co-chairman Asif Ali) Zardari, having volumes written about their corruption, being entrusted with the sale of national assets (and) that too (bypassing) all procedural (and) legal checks.

He further accused the government of plundering Pakistan over the past 30 years and the current economic crisis. He said: “These thieves should never be allowed to sell our national assets in the underhanded way they are trying. The nation will never entrust our national assets to them.

Prime Minister Shehbaz alleged that Khan suffered memory loss and gave him some “reminders”. He said: “Firstly, according to the Transparency International report, corruption increased during his reign. Even transfers/postings were on sale in addition to big rip offs. Second, people are paying the price for how he mismanaged the economy. In the third point, he accused Khan of deeply damaging Pakistan’s global prestige and its relations with “friendly” countries.

He added: “Fourthly, he has lost his sense of balance in his lust for power, as evidenced by his habitual resort to lies, propaganda [and] gross distortion of the facts.

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