Selling National Assets.

In an attempt to protect the country from debt default, the government has decided to sell national assets to foreign countries with the hope that this short-term relief will attract external investors and encourage business activity. The Inter-Governmental Commercial Transaction Ordinance has not been signed by President Arif Alvi yet but considering the pace with which the economic environment in Pakistan is deteriorating, it is only a matter of time.

With barely any foreign reserves available, loss of investor confidence and the steady devaluation of the rupee by as much as 8.3%: lowest it has been since November 1998-the ad hoc ordinance presents a way through which the state can finance the debt, instead of defaulting on it. Selling shares worth $2.5 billion of oil and gas companies and power plants will significantly reduce economic burden and could lead to productive developments within each organisation. It would further bring in a share of taxes, which foreign entities would have to pay, that the government desperately needs.

At the same time however, selling of vital national assets is a risk with immense long-term harms. Even if these assets produced little...