Introduction
Privatization, a policy shift aimed at rebalancing the roles of the public and private sectors in government policies (Smith & Lipsky, 2009), has been a prominent focus for decades. Auctions, divestitures, tenders, initial public offerings, and global depository receipts are some of the common methods employed for privatization (Qureshi, Iftikhar, & Raza, 2020). Auctions have been the most popular method, accounting for 37.5% of privatization efforts, followed by divestitures at 13.6% and tenders at 15.91%.
The paradigm shift towards privatization gained momentum following the oil price shock and economic crises triggered by state-owned enterprises. This shift led to a widespread endorsement of privatization by international donor agencies, the International Monetary Fund, and the World Bank. In the late 1980s, many countries, including New Zealand, Czechoslovakia, Latin American nations, and sub-Saharan African countries, began to sell off their state-owned enterprises.
However, underdeveloped and emerging economies continue to rely heavily on state-owned enterprises. Globally, there are still 1500 state-owned multinationals with over 86,000 subsidiaries (Karimkhan, 2018). Half of these multinationals are based in emerging economies, while one-third are in Europe. In Pakistan, as of 2018, state-owned enterprises contributed 10% to the GDP and generated 0.5 million jobs. Unfortunately, the losses incurred by these enterprises have placed a significant burden on the budget, consuming nearly Rs 1.3 trillion of taxpayers’ money in total liabilities and debt. The annual average losses of state-owned enterprises have reached Rs 900 billion.
