Pakistan Cabinet has approved an emergency law to sell government assets abroad

Cash-strapped Pakistan’s cabinet has approved an emergency bill to bypass all procedures and cancel regulatory checks for emergency sales of state assets to foreign countries, a media report said on Saturday, as the country sought to stave off a looming default.

According to the Inter-Governmental Business Transactions Order 2022 approved by the Union Cabinet on Thursday, the government has barred the country’s courts from hearing any petition against the sale of assets and shares of state-owned enterprises to foreign countries. , The Express Tribune newspaper reported.

The decision comes amid efforts to sell stakes in oil and gas companies and government-owned power plants in the UAE.

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Through this ordinance, the central government has empowered itself to issue restrictive orders to the provincial governments for land acquisition, the report said, quoting the contents of the copy of the ordinance.

But it said President Arif Alvi has yet to sign the emergency law.

In May, the UAE denied Pakistan a cash deposit due to Islamabad’s inability to repay earlier loans, instead asking it to open its companies for investment.

Finance Minister Mifta Ismail had said this week that it usually takes 471 days to complete a privatization transaction.

He had further said that the government should enter into agreements with foreign countries in a few days to raise funds urgently.

The International Monetary Fund (IMF) has stipulated that Pakistan’s case cannot be taken to the board until it arranges USD 4 billion from allies to bridge the funding gap, the report said.

Pakistan recently entered into a staff-level agreement with the IMF to disburse US$1.17 billion under the relaunch of the bailout package.

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Pakistan’s rupee plunged 8.3 percent of its value this week — the most since November 1998, underscoring the gravity of the challenges facing Prime Minister Shehbaz Sharif’s government.

However, the order has raised several transparency concerns, including pricing of shares of Mari Gas Company, Oil Gas Development Company Limited and Pakistan Petroleum Limited at lower market prices compared to their book values.

According to the documents, the Ordinance will provide a mechanism for conducting commercial transactions under the Intergovernmental Framework Agreement to promote, attract and promote economic and commercial relations with Pakistan by foreign states.

A Cabinet Committee on Intergovernmental Business Transactions will be set up and will have broad powers, including powers to override six Acts of Parliament.

The Ordinance also makes the federal cabinet so powerful that it can issue binding orders to hand over any land to the provinces and enter into any transaction with a foreign state, the report said.

The cabinet committee’s decisions cannot be challenged in courts, nor can any investigative agency open the deals, according to legal documents.

The Central Government may exempt any inter-State commercial transaction from any regulatory requirement or operation required by any law for the time being in force for the purposes of this Order.

According to The Express Tribune, this broad section has been introduced to curb the sale of government shares in violation of the Companies Act, the Securities and Exchange Commission Act, the Privatization Ordinance and other relevant laws.

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