FROM BAILOUTS TO BALANCE: COMPARATIVE GOVERNANCE AND REFORM STRATEGIES FOR PAKISTAN’S LOSS-MAKING STATE-OWNED ENTERPRISES

Abstract

This article investigates pathways for Pakistan to achieve financial self-sufficiency in its state-owned enterprises (SOEs) by reducing reliance on public subsidies. Employing a comparative case study methodology, it analyzes international experiences, including India’s Air India privatization, Germany’s railway public-private partnerships, and South Korea’s POSCO innovation-driven autonomy. Pakistan’s SOEs such as PIA, PSM, and Pakistan Railways exhibit chronic fiscal strain, inefficiencies, and governance challenges, necessitating structural reforms. The study identifies effective strategies including corporatization, outcome-based PPPs, strategic equity partnerships, independent regulatory frameworks, and performance-linked management incentives. Implementation of these reforms could save over Rs 800 billion annually, enhance service quality, strengthen fiscal stability, and attract foreign investment. The findings offer actionable insights for policymakers aiming to transform Pakistan’s SOEs into competitive, sustainable, and accountable institutions.