In business, Pakistan's government bleeds

State-owned firms in the country are estimated to lose at least $4.1 bn a year

With every flight, Pakistan's state-owned airline demonstrates the economic challenges facing the country's new government.

Each time a plane belonging to Pakistan International Airlines takes off, odds are the aircraft is more than 25 years old and not in the best of shape. It is likely running late.

It probably has a bigger crew than necessary - the airline has four, even five, times the staff per plane than a typical carrier. And ultimately, each flight is probably costing the state of Pakistan money instead of adding to its bottom line.

PIA loses the equivalent of around $305 million a year, and that's emblematic of the problems with Pakistan's state-owned enterprises. Experts estimate state-owned firms lose at least $4.1 billion a year, holes the debt-ridden government plugs through cash injections, guaranteeing loans or other means.

And that's not even counting the massive financial problems in the power sector, where some $5.1 billion in so-called "circular debt" means some parts of the country go without electricity for up to 20 hours a day.

The new government of Prime Minister Nawaz Sharif has made rescuing, reforming and possibly privatizing state-owned enterprises a priority. But although Sharif's government has a strong mandate and isn't relying on coalition partners, analysts predict the heavy political challenges mean it will likely have only limited success.

"Their election manifesto has certain proposals which could improve the economics tremendously, but that could hurt the rich and powerful in the country," said Shahid Hasan Siddiqui, chairman and chief executive of the Research Institute of Islamic Banking and Finance based in Karachi.

Even if privatisation occurs, he warned, that process "is not transparent. There is corruption in it."

Pakistan lists dozens of entities as state-owned enterprises, covering sectors such as oil, steel, fertiliser, transport, and more, though not all are intended to generate revenue. Over the years, various ruling parties have used such businesses as sources of jobs they could hand out to supporters, even as they've failed to invest in maintenance and upgrades of the infrastructure the firms needed.