Former IBM executive Mohammad Zubair embarks on quest to revive Pakistan's economy

Feb 03 2014, 12:55 IST
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Chairman of Pakistan's Privatisation Commission Mohammad Zubair speaks during an interview at his office in Islamabad. (Reuters) Chairman of Pakistan's Privatisation Commission Mohammad Zubair speaks during an interview at his office in Islamabad. (Reuters)
SummaryFormer IBM executive Mohammad Zubair says Pak can raise up to $5 bn in privatisation revenue in next 2 years.

Mohammad Zubair was on a cruise dinner with Pakistani Prime Minister Nawaz Sharif in Thailand when he was offered the hardest job of his life: privatising a huge chunk of the economy while fighting resistance from the opposition and trade unions.

When the prime minister left the table, a colleague of former IBM executive Zubair rushed to his side.

"Are you mad? Three privatisation ministers have gone to jail and most have corruption cases hanging over their heads," he said. "Don't take this job."

But Pakistan's new privatisation tsar is determined to find buyers for 68 public companies, most of them loss-making, including two gas companies, an oil company, about 10 banks, the national airline and power distribution companies - all within the next two years.

The government sees the sell-offs as a life saver for Pakistan's $225 billion economy crippled by power shortages, corruption and militant violence. Successful privatisation is Sharif's top political and economic goal.

"We lose 500 billion rupees ($5 billion) annually because of failing enterprises," Zubair told Reuters. "Every day a file lands on a bureaucrat's desk and he has to take a decision he isn't qualified to. This can't go on, no matter what."

Pakistan can raise up to $5 billion in privatisation revenue in the next two years to ease pressure on strained public finance, Zubair said.

Last September, the International Monetary Fund saved Pakistan from a possible default by agreeing to lend it $6.7 billion over three years. In return, Pakistan must make good on a longstanding promise to privatise loss-making state companies.

Privatisation officials, requesting anonymity, said several foreign investors, including the World Bank's private-sector arm, the International Finance Corporation, and the U.S. mutual fund Fidelity Investments have shown interest in the companies.

But for Zubair, a former IBM chief financial officer for the Middle East and Africa, the real challenge is overcoming resistance from thousands of workers who will have to be laid off and opposition parties who are against the plan.

Once a source of pride, Pakistan International Airlines is struggling to stay aloft, having accumulated losses of more than 250 billion rupees. A quarter of its 40 aircraft are grounded. Flights are regularly cancelled and engineers say they have to cannibalise some planes to keep others flying.

Unions strongly oppose the privatisation. The IMF wants the airline partially privatised by December.

Another asset is Pakistan Steel Mills, which has accumulated losses of more than 100 billion rupees. Overstaffed by at

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