April 23, 2023
2 mins read

Pakistan’s state-owned entities are the worst in South Asia

SOE losses are concentrated in the power, infrastructure, and transport sectors, and in the aggregate, outweigh profits from profitable SOEs….reports Asian Lite News

Pakistans state-owned entities (SOEs) are the worst in South Asia and their combined losses growing faster than assets, resulting in a significant annual drain on scarce public resources and posing a substantial risk to the sovereign.

On an annual basis, they together swallow more than 458 billion PKR in public funds to stay afloat as their combined loans and guarantees surged to almost 10pc of GDP (5.4 trillion PKR) in FY21 from 3.1 per cent of GDP or 1.05 trillion PKR in 2016, according to the World Bank that advised a deep-rooted reform programme to reverse the trend, reports Dawn news.

They “impose a significant fiscal drain and pose a substantial financial risk on the federal government”, said the World Bank, adding that these entities had been incurring losses since FY16, with annual losses averaging at 0.5 per cent of GDP over FY16�20.

“Pakistan’s federal SOEs have been found to be the least profitable in the South Asia region,” said the Public Expenditure Review 2023, adding that with the persistent losses, the accumulated SOE losses had become substantial, amounting to 3.1 per cent of GDP in FY20, Dawn reported.

Federal government exposure to SOEs, defined as the outstanding stock of guarantees and government loans to SOEs, has been rapidly increasing and stood at 9.7 per cent of GDP in FY21.

The report noted that combined fiscal exposure against domestic and foreign loans and guarantees had been increasing rapidly with annual growth averaging 42.9 per cent over FY2016�2021.

The report said that individual SOE performance was largely dictated by sectoral performance. Although the primary reasons for SOE losses differ, they are typically related to unresolved corporate governance issues, sector regulations, an underestimation of the cost of the provision in complete restructuring and insufficient current subsidies.

SOE losses are concentrated in the power, infrastructure, and transport sectors, and in the aggregate, outweigh profits from profitable SOEs.

Although a sizable number of commercial SOEs generated profits in FY20, they were concentrated in the oil and gas sector, Dawn reported.

ALSO READ: Pakistan pins hopes on Saudi deal for $2 bn deposits

Previous Story

Sundar Pichai’s pay soars to $226 mn amid job cuts

Next Story

Khalistan leader Amritpal arrested After 36 days of chase

Latest from -Top News

Hasina’s Defiant Words Before Ouster

Reportedly before leaving Hasina wanted to record a farewell speech to be aired on television, but military officials declined….reports Asian Lite News Following a violent student uprising last year, the Bangladeshi military

FS Misri in US to Boost Tech, Trade Ties

The meeting, held in Washington, focused on strengthening existing frameworks and building momentum on key tech and trade initiatives…reports Asian Lite News Foreign Secretary Vikram Misri on Wednesday (India time) met with

Activists Targeted Again in Balochistan

The Baloch Yakjehti Committee (BYC) on Tuesday condemned the enforced disappearance of Baloch leader Ghani Baloch, blaming Pakistan’s Law Enforcement Agencies and Frontier Corps….reports Asian Lite News The Baloch Yakjehti Committee (BYC),

Islamabad-Ankara-Baku Axis Sharpens Against India

Both Turkey and Azerbaijan have openly expressed solidarity with Pakistan and backed Islamabad in its military standoff with India, this month….reports Asian Lite News The evolving alliance between Islamabad, Ankara, and Baku

India Targets Pak Terror Ties in Guyana

The delegation met the Guyanese President, Mohamed Irfaan Ali, who had hosted a dinner to celebrate friendship and shared aspirations between the two nations…reports Asian Lite News Congress leader Shashi Tharoor, currently
Go toTop

Don't Miss

Pakistan National Security Advisor due in Kabul

No date for the NSA’s visit was announced during the

‘This is New Pakistan?’: Imran’s ex-wife escapes gun attack in Islamabad

In a series of tweets, Reham wrote that she had