Pakistan's economic reform agenda took a concrete step forward this week as the government and the Pakistan Business Council (PBC) aligned on a sweeping plan to restructure state-owned enterprises. The discussions, held at the Finance Division, signal a renewed push to shrink the state's commercial footprint and hand greater responsibility to private investors. Main Developments The meeting brought together Advisor to the Finance Minister Khurram Schehzad and PBC's newly appointed Chairman Ziad Bashir, along with CEO Javed Kureishi. Their agenda centered on privatizing power distribution companies (DISCOs), banks, and airports, with a focus on improving efficiency and service delivery. Read also: Why Kohinoor Textile's 48MW battery bet could reshape Pakistan's grid Beyond outright sales, the talks explored bringing major public-sector entities to capital markets through initial public offerings (IPOs), including State Life Insurance Corporation (SLIC). This approach aims to attract private and institutional investors, which officials say could improve corporate governance, transparency, and access to capital. PBC leadership voiced support for the government's rightsizing agenda, emphasizing the need for a leaner public sector. The council agreed to share detailed recommendations on privatisation, SOE restructuring, and other areas where private investment could boost economic efficiency. Background The push to restructure SOEs comes amid longstanding concerns about the financial burden of state-owned enterprises on Pakistan's economy. Loss-making entities have drained public resources for years, prompting successive governments to explore privatisation as a remedy. The new PBC chairman has been particularly vocal, urging the government to offload all loss-making SOEs within 12 months on a war footing. This urgency reflects broader frustration within the business community over the slow pace of reforms. Why It Matters Restructuring SOEs is central to Pakistan's efforts to attract investment and stabilize its economy. Expanding private-sector participation could reduce fiscal pressure, improve service delivery, and send a positive signal to domestic and foreign investors. The meeting also touched on tax rationalisation, with both sides emphasizing the need for a predictable and competitive tax regime. This aligns with the government's stated shift from increasing tax burdens to broadening the tax base—a move welcomed by the business community. What's Next PBC is expected to submit its formal inputs on privatisation, SOE restructuring, and rightsizing to the government in the coming weeks. These recommendations will inform ongoing discussions on medium-term tax policy and broader structural reforms. The government has signaled continued consultation with business leaders as it develops practical reform measures. Success will depend on translating these discussions into concrete action, particularly on the ambitious 12-month timeline for loss-making entities.