ISLAMABAD (INP): President All Pakistan Business Forum (APBF), Syed Maaz Mahmood has stressed the need for new policies and widespread structural reforms in the upcoming year of 2024 to help investors launch their ventures with ease and comfort, as the country has been lagging behind in the ease of doing business index over the years and especially in the concluding year of 2023.
In his new year message issued on Sunday, he observed that a policy should be finalized after incorporating inputs from real stakeholders of the business community, including the APBF, with the sole aim of facilitating foreign and domestic investment by removing the unnecessary bureaucratic and administrative hurdles that slow down the process of starting new business ventures and hinder economic growth.
Quoting the figures, Maaz Mahmood stated that in the recent Ease of Doing Business Index, Pakistan is considerably behind peer economies, ranking 108 out of 190. In the regulatory area of Starting a Business, Pakistan ranked 72 out of 190 countries.
The scope of the new policy intervention in 2024 should be limited to NOCs required by federal regulatory agencies for incorporation and starting operations of a business activity. This policy should cover business registration and authorization required for business operations. The policy should be applicable on all public sector entities of the federal and provincial governments that regulate businesses.
The business leader said that World Bank Group’s Doing Business project provides a measure of the “Ease of Doing Business” through a set of objective indicators that focus on the impacts of laws, regulations and their enforcement across 190 economies.
The government claimed that it has consistently been making efforts to improve business environment in the country.
In previous years, almost 300 reforms have been implemented to improve investment climate in the country, it added.
But the growing political uncertainty and institutional imbalances are adversely affecting the country’s perception.
The World Bank in a publication has reported the country’s current economic model is not working since it has fallen behind its peers, significant progress in poverty reduction has now started to reverse, and the benefits of growth have accrued to a narrow elite.
Improving the efficiency of power distribution companies to encourage exports through increased private participation, and address the very high costs of electricity generation through increased renewable generation.
He underlined that fiscal management must be drastically improved, and debt servicing costs and domestic revenue mobilisation are at unsustainable levels, leaving adequate resources to invest in human development and infrastructure, address economic challenges.
Cutting red tape as well as opportunities for costly discretion in the government’s dealing with businesses is paramount. Structural macroeconomic imbalances, particularly on the fiscal side, will remain a prerequisite to ensure a more stable economic environment to attract investors.
The country is at a losing end insofar as poverty alleviation is concerned. Pakistan also has the lowest per capita income in South Asia and highest out-of-school kids in the world. In comparison with the region, Pakistan’s per capita income, as of 2023, is $1660 as compared to $3,700 of Vietnam, $2700 of Bangladesh $2380 of India. In the 80s, Pakistan’s per capita income was far head of these countries’. Furthermore, as of 2023, India’s GDP at $.7 trillion is 11 times higher than Pakistan’s GDP of $341 billion.
The APBF leader Maaz Mahmood said the policy should simplify the process of registering a business venture and minimize delays, as one of the significant regulatory barriers to investment and doing business in Pakistan is compliance with no-objection certificates, which are commonly considered regulatory barriers in obtaining regulatory approvals to investments and doing business.
Through this policy, the government must plan to replace NOCs requirement for business regulation with a system of compliance verification through an effective mechanism that should operate in federal regulatory agencies adopting this policy and cover related procedures.
He said that the use of NOCs should be replaced progressively at the federal as well as provincial level by a risk-based and inter-agency compliance verification mechanism to facilitate investments and doing business in Pakistan.
The business leader said that the low levels of investment can be attributed to a complex, multi-layered, and opaque regulatory regime that involves enforcement by federal, provincial, and municipal government agencies. Regulatory instruments used under this regime consist of various registrations, licenses, permits, and certificates, including NOCs. These regulatory requirements significantly increase the cost of doing business.
He argued that the Ease of Doing Business could help promote entrepreneurship, innovation and job creation, besides stimulating economic growth, removing unnecessary delays and procedures.
