KARACHI: Federal Minister for Industries and Production Makhdoom Khusro Bakhtiar on Friday said industrial development is a core priority of the government, with focus on small and medium enterprises particularly on export-oriented ones.
In a meeting with officials of American Business Council of Pakistan here, the Minister said SMEs were 90 percent of the manufacturing sector numbering to 5.2 million. The major SMEs included textiles, leather, footwear, surgical equipment, sports goods, and light engineering goods.
He said the present government had introduced significant regulatory reforms to facilitate investment and industrial expansion. The reforms had led to an improvement of 28 places in Pakistan’s ranking on the World Bank’s Ease of Doing Business Index-2020 (i.e. from the 136th to the 108th position). The Federal Ministry was in the process of developing a national SMEs policy.
The priority areas of this policy included financial incentives (enhancing SMEs access to finance); fiscal incentives (simplified taxation regime for SMEs); and o regulatory simplification for SMEs.
“ We are also in the process of introducing a new automobile policy to incentivize local manufacturing and export of automobiles,” he said adding that . there was significant potential for exports of tractors and motorbikes, especially e-bikes. Some parts of the new policy had already been implemented , for instance tax reforms.
The government injected Rs1.2 trillion as a “stimulus package” for industry and other sectors of economy during the last year and a half to help support the business and industrial enterprises to overcome the economic shocks induced by the COVID-19 Pandemic. The government was promoting the diversification and modernizing of its industrial base through the use of advanced technologies.
His Ministry was also working to improve the macroeconomic and regulatory environment, access to finance, skills and human resource, infrastructure development, entrepreneurship, innovation and incubation, business development services and local and international market opportunities for industrial enterprises.
American Business Council Pakistan’s representatives discussed matters related to declaring tourism as industry, facilitating bulk imports to develop the food services sector as industry, exploring the potential of export processing zones, EPZs.
During his visit to Transsion Techno Electronics (Pvt) Limited, Federal Minister for Industries Makhdoom Khusro Bakhtiar said mobile phone industry had the potential to become a leading contribution towards the country’s economic growth since it was labour intensive in nature and could create job opportunities for the workers, technicians, engineers and management professionals.
He said most of the large foreign direct investment had come into fast moving consumer goods and telecom sectors. FMCG sector was import-reliant for raw and packing materials. Thus, high growth had impact on the external account. The FDI policy should differentiate in favour of export-led and technology-intensive sectors or those for which local investors lack capital/risk appetite.
FDI into other sectors could be conditional upon joint ventures /public listing, export generation and import-substitution, he said.