For A Song.

The government is mulling the sale of shares in prime state-owned companies to foreign owners, and the rationale being provided is that the country must take desperate measures to avoid an imminent default. That eventuality would have far graver consequences than the country is prepared for, particularly given the global uncertainty and fragility that has erupted and which may persist for some time. One only need look at the immense hardship that the people of Sri Lanka are undergoing, some argue, to witness a cautionary tale.

This is the backdrop in which the Inter-Governmental Commercial Transactions Ordinance 2022 has been put forward. It stipulates that there would be zero ex-ante and ex-post accountability in proceeding with commercial government-to-government (G2G) transactions, whether in the sale, purchase, investment, divestment, procurement, licensing, lease, joint ventures, assignments, concessions, services contracts, management contracts or other deals arising out of a G2G or commercial agreement.

There are at least six laws on the books which would be bypassed by this ordinance. These include the Companies Act, 2017, the Privatisation Commission Ordinance, 2000, the Public Procurement Regulatory Authority Ordinance, 2002, the Public-Private Partnership Authority Act, 2017, the Securities and Exchange Commission of Pakistan Act, 1997, and the Securities Act, 2015. This is an inordinate amount of somersaulting for any system, and the argument of the Finance Minister is that it takes more than a year (471 days is his figure) for regulatory and procedural hurdles to be overcome.

There is a sense of urgency given the country's weak monetary position and massive recent devaluation, as well as the IMF's delayed disbursement and conditionality of first procuring $4 billion from elsewhere before it gives a paltry $1.2 billion. Furthermore, the ordinance would let the government or its appointed bodies overrule federal-provincial dynamics and any ex-ante due diligence or scrutiny, in order to hand over shares in key national enterprises. The primary target buyer is the UAE, to whom $2-$2.5 billion in equity will be exchanged for dollars. While the sense of precipitated action is recognisable, there are three reasons why this ordinance should not proceed in its current form.

The first reason is that the amount earned for this equity will be too low, given the quality of assets in question, which are in the critical and sensitive energy...