In a stark manifestation of internal discord within the Pakistani government, Deputy Prime Minister Ishaq Dar and Finance Minister Muhammad Aurangzeb find themselves at loggerheads over the issue of privatisation. As both figures wield considerable influence in economic policymaking, their conflicting viewpoints threaten to exacerbate existing challenges facing the nation’s economy.
Finance Minister Aurangzeb advocates for an expedited privatisation agenda, citing the unsustainable burden posed by state-owned enterprises (SOEs) on Pakistan’s economy. He contends that privatising these entities is imperative for economic revitalisation. Conversely, Deputy Prime Minister Dar, a confidant of Nawaz Sharif and formerly the finance minister himself, expresses reservations about the wholesale privatisation approach. He cautions against depleting political capital and advocates for a more nuanced strategy, focusing on preserving “strategic and essential SOEs.”
The divergence in opinions came to the fore during a pre-budget conference where Minister Aurangzeb outright rejected the concept of “strategic SOEs,” emphasizing that all SOEs, regardless of classification, should be transferred to the private sector. This stance directly contradicted Dar’s vision, which entails scrutinising SOEs and retaining only those deemed strategically essential.
The decision-making process is further complicated by the involvement of the Cabinet Committee on SOEs, chaired by Minister Aurangzeb, tasked with determining which entities qualify as strategic or essential. Despite backing from influential circles and international bodies like the IMF, Minister Aurangzeb faces resistance, particularly from Dar, whose economic ideas diverge from the prevailing consensus.
The rift within the ruling party underscores the precarious balance between implementing necessary economic reforms and preserving political stability. With Pakistan poised to enter talks for another IMF bailout, the discord over privatisation policies adds another layer of uncertainty. The IMF, already wary of potential risks associated with economic stabilisation efforts, may view the internal disagreement with apprehension.
The ongoing standoff between key figures in the Pakistani government reflects broader tensions between the imperative for drastic economic reforms and the political realities that constrain their implementation. As the nation grapples with pressing economic challenges, the resolution of this internal discord will significantly impact its trajectory towards recovery and stability.