IN the next five years, the PTI government wants Pakistan to be in the list of the top 50 countries where it is easier to do business than elsewhere in the world. The target appears ambitious given Pakistan’s current position at 136 among 190 economies ranked by the World Bank’s Ease of Doing Business index. Yet, many would say it is doable. The country has already successfully improved its rank by 11 points from 147 in 2017 because of reforms initiated three years back. However, the bureaucracy’s anti-business bias and red tape could delay the execution of the required reforms. After all, the simplification of procedures and friendlier regulations will weaken officialdom’s control over businesses and plug one of the most lucrative avenues of corruption.

The government is trying to remove snags hampering investment and industrial growth by tweaking policies and attempting to improve regulations to unshackle industry and attract investors to escalate economic growth. It has announced several fiscal and policy incentives that it expects will help revive investor confidence. Now it is focusing on creating a sustainable business-friendly regulatory environment to woo domestic and foreign investment, essential for long-term, rapid economic growth. Top trade and investment officials the other day highlighted some of the measures they had executed or are going to implement in the next few months to make it easier for an investor to start a business or set up an industry. These measures include a decrease in the number of tax and other payments companies make to the government from 47 to 16, reduced interaction between state functionaries and businesspeople through the use of technology, launch of a one-window facility for registration of a company or property, automation of construction permits and the creation of dedicated offices to facilitate smooth business operations. Going forward, it plans to club together multiple federal and provincial taxes and levies into one to make it easier for firms to pay their government dues. Indeed, simpler laws, regulations and procedures are crucial for encouraging private investment. However, the government needs to give equal attention to improve factors of production if it wants to reverse the process of deindustrialisation and boost exports. For example, it should initiate projects to improve labour productivity, ensure availability of low-cost capital to the industry — especially the small and medium entrepreneurs — and develop efficient industrial estates with plug-and-play facility for investors.

Published in Dawn, February 2nd, 2019