SETTING up of nine special economic zones had been conceived under the umbrella of CPEC to herald second phase of industrialisation in the country. The ground breaking ceremony of one such zone in Faisalabad, Allama Iqbal economic zone, was performed by the Prime Minister last year. Pakistan and China is signing an agreement to develop Rashakai Special Economic Zone near Mardan in Khyber Pukhtunkhwa. The economic zone will provide favourable business environment to attract foreign direct investment, said Chairman Board of Investment Arif Bukhari in a presses release. The provincial government on its part had acquired land and had built road infrastructure and developed industrial plots. The provision of electricity and gas fall within the domain of federal government. Nothing has yet come to light as to whether power division has finalised the PC-1 for the building of 200 KV Grid Station for electricity supply to Rashakai Special Economic Zone. Similarly, a PC-1 has to be finalised by Petroleum Division for the supply of gas to this economic zone.
Local entrepreneurs are eager to have joint ventures with foreign investors, which will be possible only when the technological base of existing industries is upgraded to contemporary technologies. Chairman State Engineering Corporation had drawn the attention of business leaders towards it in his meeting with them at Islamabad Chamber of Commerce and Industry.
Majority of local industries, except few, have Research and Development units. Foreign direct investment yield maximum benefit when programmes of indegenisation of imported technologies and skill development are implemented. At present launching of these programmes have not been priortised. Government organisations of R&D are redundant as under public sector 0.42 percent of the GDP is spent on it. Private sector is shy of investment in R&D. Moreover, no linkage exists between government organisations of R&D and private sector industries. Likewise, the institutes of vocational and technical training are not producing the skilled manpower of the required caliber, which would be needed for the industries to be set up in special economic zones. Proper homework has to be done by the federal and provincial governments to provide all ingredients that make economic environment conducive for foreign direct investment.
