February 24, 2006	Friday	Muharram 25, 1427

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ISLAMABAD, Feb 23: The government plans to formulate a long-term industrial policy with the support of all stakeholders to ‘avoid sudden business shocks’. Sources say the government has been advised by experts and analysts to urgently formulate a new long-term industrial policy to attract sizable local and foreign investments in the country.

The government has also been urged to improve the country’s image in terms of law and order situation, environment, security, trained labour force and making the cost of doing business in Pakistan easy and inexpensive.

The experts and analysts believe that there was an immediate need to remove discrepancies/anomalies of preferential treatment for duty free imports of products, particularly for infra-structural projects.

Similarly, the government was advised to implement intellectual property laws and an enforcement system, along with restructuring the Engineering Development Board (EDB) for effective support to the industry.

A group of experts and analysts of the Pakistan Institute of Development Economics, the Higher Education Commission and the OIC Committee on Scientific and Technological Cooperation (Comstech) have also called upon the government to go for rationalization of tax and tariff regimes and encourage research and development organizations to manufacture precision and testing equipment.

The experts believe that there was an urgent need to reform taxation system to ensure effective implementation of R&D tax benefits and timely tax refunds.

The government was also recommended to expedite enactment of effective repossession laws to encourage leasing and that the Consumer Financing Scheme for market enhancement should be extended by employers including those in the public sector through secured guarantees against gratuity/provident fund to suppliers for leasing transport and domestic appliances to their employees.

The government was recommended to encourage tripartite partnership among investors, technology partners and local industrialists with assured work load. Similarly, there was a need to facilitate export of capital goods especially by making Saarc and ECO certain effective trade blocs.

The government was also urged to renegotiate existing agreements with foreign partners to permit exports, which also included tractors, cars etc., from Pakistan.

The absence of consistent policies and political will in developing the local industry manifested in widespread smuggling of engineering goods. The government was proposed to give up ad hoc approach in policy formulation and preference for turn-key imports of plants and machinery.

The poor performance of the engineering sector, according to the official experts and analysts, has produced irrational and discriminatory tariff structure with relatively high import tariff on inputs and low/zero rates on outputs/finished goods along with cumbersome procedure for custom clearance of imported inputs.