The HBL verdict


Going by the trend, a Supreme Court verdict that doesn’t derail a contested privatisation exercise sets a precedent in itself. Yet there are a number of features in the HBL decision that need careful attention. One, it sends a strong ‘transparency’ signal to interested investors, especially the foreign variety. Two, coming when Pakistan must embark on a very ambitious privatisation drive very soon, the timing is important, and addresses concerns regarding credible risk management and political interference quite amicably. Three, it bolsters the privatisation commission, perhaps pushing for a permanent arrangement that resolves all issues related to fair-pricing prior to binding, deciding signatures. Four, and perhaps most important, it makes for the text-book successful strategic privatisation case, and impresses upon all parties concerned the benefits of relieving the centre’s fiscal burden.
In fairness, due credit must also be given to HBL’s post-privatisaion team. Success is the only and ultimate vindication in such endeavours. They are at the centre of the turnaround narrative, which must now be embraced across the board. The key to economic survival in the immediate to medium term will be transparency and efficiency, without which serious investors will simply not channel funds towards Pakistan. Simply put, if the economy is to register meaningful growth and the centre’s fiscal burden controlled, we must have more such cases.
We have repeatedly called for turnaround and strategic privatisation of loss-making entities in this space. Now, with the boost to the privatisation commission’s credibility, we must prepare other enterprises for similar treatment, checking unnecessary leakages and stimulating growth and healthy competition at the same time. It is now extremely important that this momentum is not lost. Our current economic and social complexities simply do not allow it.


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