Pakistan prepares action plan to attract investment

ISLAMABAD — Pakistan government is considering a set of proposals to attract substantial local and foreign investment by offering new incentives and by drastically improving regulatory framework for various sectors.

By A Correspondent

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Published: Sat 21 Apr 2007, 8:34 AM

Last updated: Sat 4 Apr 2015, 9:15 PM

Official sources said that an "action plan" has been firmed up for attracting investment specially by removing impediments in industry, agriculture and services sectors.

The action plan contained in a detailed report is expected to be discussed and approved in the next cabinet meeting. It has been jointly prepared by the Planning Commission, Higher Education Commission (HEC) and Pakistan Institute of Development Economics (PIDE).

Sources said that before the cabinet meeting, President General Pervez Musharraf would also be briefed about the report.

"This is a very important report which aims at improving all the major sectors of the economy by implementing a number of proposals", federal minister and the chairman of HEC Prof. Dr Atta-ur-Rehman said.

The report has, he said, carried out an in-depth analyses of the major sub-sectors of the three major productive sectors of the economy — agriculture, industry, and services — and within each sub-sector identified key issues and challenges and suggested a detailed action plan to realise the major economic objectives of the government.

The two major themes of the report, he said, are human resource development and research and development to provide incentives to the private sector to invest in potential sectors of the country's economy.

According to the report, a sustained growth rate of five to six per cent in agriculture is imperative to ensure rapid growth in national income, macroeconomic stability, improvement in distributive justice and reduction in poverty. This can be realised by exploiting the potential of all the sub-sectors of agriculture.

A higher level of investment in agricultural research and development activities supported by favourable policy instruments, human resource development and necessary physical and institutional infrastructure can prove a catalyst towards achieving enhanced productivity and a desired growth rate.

The textiles and clothing sector is the mainstay of Pakistan's economy. With a 24 per cent share in the manufacturing sector, the textiles sector employs 38 per cent of the workforce in the industrial sector and constitutes roughly 70 per cent of total exports. The textiles sector, the report added, is facing a number of challenges including a low technological base, lack of research and development, lack of trained manpower, low quality standards, concentration in low value-added products and too much reliance on cotton. To address these challenges and to facilitate the transformation of the textile sector into a strong, dynamic, and internationally competitive industry led by the private sector, the public sector must create an enabling environment through a business-friendly regulatory framework, appropriate incentives to the private sector, institutional support and provision of quality infrastructure.

Key elements of the proposed action plan for the textiles sector include: improving the regulatory and policy framework; human resource development through improvement the HRD institutions and encouraging the private sector to invest in skill enhancement; promoting research and development through strengthening the existing institutions and establishing new institutions in the areas of garments, knitwear, sample development and CAD/CAM centres; technology upgradation; rewarding value addition; ensuring quality standards and establishing common facility centres.

Leather and leather products play a significant role in Pakistan's economy. The leather industry is mainly export-oriented and has a potential to grow rapidly, provided measures are put in place to encourage value addition as well as to improve product quality.

"There is a need to diversify into fast growing sectors like engineering and electronics". Engineering industry is one of the most dynamic industries in world having great potential for growth. The strategic focus in the engineering sector is on bridging the widening technological gap with the developed countries by providing conducive environment including the required technological, financial and physical infrastructures, and creating a seamless integration with emerging trends of global production systems.

The most important step for the promotion of engineering sector in Pakistan, the report believed, is to allocate more resources to technical education. There is also a need to develop design engineering capabilities, databases and infrastructure, create testing laboratories and instrument and initiate public-private partnership in projects leading to innovation of new products and processes.

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