What's new

Special Economic Zones (SEZs) - a long way to go

ghazi52

PDF THINK TANK: ANALYST
Mar 21, 2007
78,880
82
130,389
Country
Pakistan
Location
United States
Special Economic Zones (SEZs) - a long way to go

BR Research
06 Dec 2021



61ad7ea695ed2.jpg



A lot of the times when worsening foreign direct investment in the country is criticized, especially as flows from China under CPEC are also slowing down, all hopes are pinned to what the authorities call the second phase of CPEC: the development of SEZs. The State Bank of Pakistan describes Special Economic Zones (SEZs) as an important investment policy tool to address the problems of low investments, exports, and industrialization by addressing these issues by ensuring a business-friendly environment within a designated boundary, with institutional, legal, and infrastructural architecture.


Special Economic Zones are the test ground for reforms,policies, industrialisation and investment. Where many countries have adopted the SEZ model, Chinese progress is unmatched. Highlights of China’s experience with SEZs has been about experimentation and testing as well as the ability to reform, drive national development and boost research and development.

While some form of the same such as Industrial Estates (IEs) and Export Processing Zones (EPZs) have existed in the country since the 1970s, the SEZ concept is a recent phenomenon in Pakistan. So, while China’s success has been a key factor for optimism for Pakistan when SEZs were announced under CPEC, SEZs are still in the stage of infancy, and the progress has been slow and the results and hopes attached to them remain unfulfilled.

Special Economic Zones usually have a primary goal, which can vary from one zone to another. The success of SEZs too is partially dependent on their ability to achieve that goal. From what it seems, the primary objective of SEZs in Pakistan is to attract FDI, exports, foreign exchange. SBP’s annual report for FY21 highlights the same with further analysis on the progress as well as the challenges and the opportunities they hold for the country.

The central bank’s findings show that it can take about six and a half years from the time an SEZ is conceptualized till it becomes fully colonized with operational zone enterprises. Whereas the success or failure of an SEZ can be assessed after a decade of it becoming fully operational and sufficiently colonized, which means it is difficult to give a final ruling on the country’s SEZ progress.

However, key challenges to SEZ growth have ironically been the typical bureaucratic, processing, and regulatory issues that businesses and the macro-economy face otherwise. These completely go against the true essence of setting up and colonizing an SEZ i.e., insulating SEZs from complex processes and procedures for approvals, registrations, and licenses; legal challenges.

Other challenges include the lack of skilled labour; hurdles to one-stop shops; overlapping coordination between functions; a weak framework for long-term operational sustainability of the zones; technical hurdles in the financing of zone enterprises; and weak monitoring mechanisms.

The effects of such hurdles can be seen from investors pulling out of Punjab SEZs due to unnecessary documentation requirements by the authorities; or the Dhabeji Industrial Zone project that has been halted as the award of a contract is challenged in Sindh High Court.

Key recommendations include transitioning the SEZ framework from one that focuses on first-time colonization to the one that also provides operation and maintenance, financing, and monitoring. The SEZs need a stated goal and a clear policy framework. There is a need to create a separate centralized autonomous SEZ authority. The one-stop shop concept must implement in true spirit the simplification of procedures, limited human interaction, and shorter timelines for applications concerned with SEZs.
 

ghazi52

PDF THINK TANK: ANALYST
Mar 21, 2007
78,880
82
130,389
Country
Pakistan
Location
United States
Prime Minister Imran Khan has inaugurated the largest tax free Special Tech Zone in Pakistan so far. The Lahore Technopolis will enable the growing tech industry in the country through generous incentives.


1640265747079.png
 

Bouncer

FULL MEMBER
May 31, 2014
1,444
1
1,762
Country
Pakistan
Location
Pakistan
Prime Minister Imran Khan has inaugurated the largest tax free Special Tech Zone in Pakistan so far. The Lahore Technopolis will enable the growing tech industry in the country through generous incentives.

Government needs to ensure a consistent taxation policy. Every budget and mini budget gives a scare of taxation to IT sector. Make policies and then stick to them.
 

ghazi52

PDF THINK TANK: ANALYST
Mar 21, 2007
78,880
82
130,389
Country
Pakistan
Location
United States

Pakistan invites Singaporean companies to invest in SEZs under CPEC​

January 28, 2022
brecorder.com

ISLAMABAD: Pakistan and Singapore, on Thursday, renewed strong desire and resolve to consolidate and further enhance cooperation in diverse fields in line with their shared objectives of peace and development.

The two sides held Bilateral Political Consultations (BPC) in virtual format, in which, Pakistan’s side also invited Singaporean companies to explore emerging investment opportunities in Pakistan in sectors such as digital economy, Fintech and agro-food, besides China-Pakistan Economic Corridor (CPEC)-related special economic zones (SEZs).

Asim Iftikhar Ahmad, Additional Secretary (Asia-Pacific) and Ng Teck Hean, Deputy Secretary, Asia Pacific and Southeast Asia, Ministry of Foreign Affairs of Singapore, led their respective delegations.

According to a statement of the Foreign Office, the entire gamut of bilateral relations – covering cooperation in political, economic, defence and security, academic, science and technology, technical training, environment, culture and tourism domains – came under discussion.

Welcoming the steady progression in multi-dimensional bilateral relations over the years, based on mutual trust and understanding, the two sides renewed strong desire and resolve to consolidate and further enhance cooperation in diverse fields in line with their shared objectives of peace and development.

They noted the importance of regular interaction and dialogue under existing mechanisms and exchange of high-level visits to impart further momentum to the relationship.

The additional secretary (AP) highlighted Pakistan’s focus on geo-economics leveraging peace and security, development partnerships, and connectivity. He stressed the importance of translating the long-standing friendship and political goodwill between Pakistan and Singapore into mutually-beneficial substantive economic relationship with focus on trade and investment, connectivity and development cooperation given that the two countries were gateways to their respective regions.

He also thanked the government of Singapore for the generous donations by Temasek Foundation to assist Pakistan’s Covid-19 response in the early phase of the pandemic. The deputy secretary said Singapore looked forward to expanding cooperation in existing and new fields of mutual interest, and enhancing bilateral exchanges especially high-level visits.

The two sides also noted the complementarities and potential of trade in services. Singaporean companies were invited to explore emerging investment opportunities in Pakistan in sectors such as digital economy, Fintech and agro-food, besides CPEC-related SEZs.

In the context of regional situation, the additional secretary (AP) shared Pakistan’s perspective on Afghanistan, and the imperative of a just and peaceful resolution of the Jammu and Kashmir dispute for regional peace and stability.

“The two sides also exchanged views on ASEAN, and Pakistan’s Full Dialogue Partnership. It was also agreed to continue close cooperation in the multilateral domain particularly at the United Nations,” it added.
 

FuturePAF

SENIOR MEMBER
Dec 17, 2014
7,015
20
8,136
Country
Pakistan
Location
United States

Pakistan invites Singaporean companies to invest in SEZs under CPEC​

January 28, 2022
brecorder.com

ISLAMABAD: Pakistan and Singapore, on Thursday, renewed strong desire and resolve to consolidate and further enhance cooperation in diverse fields in line with their shared objectives of peace and development.

The two sides held Bilateral Political Consultations (BPC) in virtual format, in which, Pakistan’s side also invited Singaporean companies to explore emerging investment opportunities in Pakistan in sectors such as digital economy, Fintech and agro-food, besides China-Pakistan Economic Corridor (CPEC)-related special economic zones (SEZs).

Asim Iftikhar Ahmad, Additional Secretary (Asia-Pacific) and Ng Teck Hean, Deputy Secretary, Asia Pacific and Southeast Asia, Ministry of Foreign Affairs of Singapore, led their respective delegations.

According to a statement of the Foreign Office, the entire gamut of bilateral relations – covering cooperation in political, economic, defence and security, academic, science and technology, technical training, environment, culture and tourism domains – came under discussion.

Welcoming the steady progression in multi-dimensional bilateral relations over the years, based on mutual trust and understanding, the two sides renewed strong desire and resolve to consolidate and further enhance cooperation in diverse fields in line with their shared objectives of peace and development.

They noted the importance of regular interaction and dialogue under existing mechanisms and exchange of high-level visits to impart further momentum to the relationship.

The additional secretary (AP) highlighted Pakistan’s focus on geo-economics leveraging peace and security, development partnerships, and connectivity. He stressed the importance of translating the long-standing friendship and political goodwill between Pakistan and Singapore into mutually-beneficial substantive economic relationship with focus on trade and investment, connectivity and development cooperation given that the two countries were gateways to their respective regions.

He also thanked the government of Singapore for the generous donations by Temasek Foundation to assist Pakistan’s Covid-19 response in the early phase of the pandemic. The deputy secretary said Singapore looked forward to expanding cooperation in existing and new fields of mutual interest, and enhancing bilateral exchanges especially high-level visits.

The two sides also noted the complementarities and potential of trade in services. Singaporean companies were invited to explore emerging investment opportunities in Pakistan in sectors such as digital economy, Fintech and agro-food, besides CPEC-related SEZs.

In the context of regional situation, the additional secretary (AP) shared Pakistan’s perspective on Afghanistan, and the imperative of a just and peaceful resolution of the Jammu and Kashmir dispute for regional peace and stability.

“The two sides also exchanged views on ASEAN, and Pakistan’s Full Dialogue Partnership. It was also agreed to continue close cooperation in the multilateral domain particularly at the United Nations,” it added.
Dialogue with foreign investors (especially getting their feedback and recommendations and requirements for investments) and success in SEZs may change the minds of reluctant major industrialists, that changes can benefit them more than the status quo if the pie grows. But having said that, the government needs to find more BOT models for investment, because the country can keep getting stuck confronting rising debt by taking loans.
 
Last edited:

Users Who Are Viewing This Thread (Total: 1, Members: 0, Guests: 1)


Top Bottom