ISLAMABAD, March 29: The World Bank and the Asian Development Bank (ADB) have urged the government to attract the much needed sizable foreign investment by implementing appropriate legal and regulatory frameworks for Intellectual Property Rights (IPRs).

Informed sources told Dawn on Wednesday that both donors also wanted Pakistan to seek foreign industrial technology for achieving greater industrialization by ensuring fast, efficient and transparent dispute resolution mechanism (DRM) in the country.

One of the major obstacles to signing of the much sought after Bilateral Investment Treaty (BIT) with the United States had been the non-existence of credible dispute resolution mechanism, in the absence of which the American investors would remain shy of investing substantially in Pakistan.

Sources said that the Planning Commission had agreed with both the donors that an important corollary of fostering productivity and innovation needed to create an enabling environment as well as the related mechanism.

It has been proposed to the government to promote foreign investment through alliances or sub-contracting from within or outside the country.

The main contours of the various macroeconomic models, according to the Planning Commission, will be acceleration in GDP growth with stability, through rapid productivity increase and industrialization of all activities whether agriculture, manufacturing or services (better practices, inputs and research, diversification, quality management, improvement in productivity) through appropriate policies. It will also focus on increasing investment and national saving rates so as to attain higher growth with lessened dependence on foreign resources and ways and means to keep inflation within reasonable range.

The officials of the Planning Commission had called for raising productivity which according to them was absolutely essential not only for economic growth but even to remain competitive in the world economy and that an exclusive reliance on factor accumulation would no longer suffice.

The experience of the developed countries shows that almost two-third of increase in per capita income can be attributed to increase in productivity which is mainly contributed by innovation and human capital.

The entire process for increasing productivity, the commission believed, needs to be based upon the realization that most people who actually do work (farmers, workers on building sites in the factory floor, and those who work in trade) are hardly educated and may not even be literate.

The government was also advised to devise an export-led industrial growth strategy and reform labour policies in order to promote better productivity and better employer-employee relations.