ISLAMABAD: The establishment of special economic zones (SEZs) under the China-Pakistan Economic Corridor would revive industrialisation in the country, an expert told WealthPK.
He said that SEZs would not only expedite the process of industrialisation in the country but also provide an opportunity to the well-off overseas Pakistanis to return to their homeland and take part in the nation-building process.
Pakistan attained the highest industrial growth at a rate of 15 percent during the 1950s and early 1960s. According to the latest economic survey, the industrial growth rate of Pakistan stands presently at 7.19 percent. The lack of interest by investors can be cited as the main reason for the decline of industrial growth in the country.
The performance of the manufacturing industry has been badly affected by the shortage of investment. However, Pakistan is committed to a paradigm shift to improve the performance of the manufacturing sector and revive its importance in the gross domestic product and exports.
The China-Pakistan Economic Corridor has laid down a solid foundation for industrialisation in Pakistan through the establishment of special economic zones. The establishment of SEZs will be a once-in-a-lifetime opportunity for Pakistani firms to work jointly with Chinese companies and adopt their ‘collaborative business model’ to get connected to the industrial clusters and improve their business.
The SEZs will also help to create a large number of jobs that will result in controlling unemployment and poverty alleviation in the country.
Dr Zafar Mahmood, a professor at the National University of Science and Technology (NUST), told WealthPK during an interview that SEZs are a harbinger of Pakistan’s industrial growth in several ways. “The zones will create an investment-friendly environment besides technological uplift, both of which are essential for industrial growth,” he added.
He said that there is a special economic zone in Palestine, jointly run by Israeli firms. “It has provided immense benefit to Palestine in terms of employment opportunities. This free trade agreement has helped in the growth of industries in Palestine,” he added.
Dr Zafar said that besides creating a business-friendly environment, the SEZs would provide an opportunity to some of the well-off overseas Pakistanis to return home and take part in the nation-building activities. The SEZs, if carefully planned, would certainly meet the expectations of people.
He said that Chinese potential investors looked at the overseas Pakistanis as a big social capital owing to their skills and experience they acquired abroad. “Private investors from China are accustomed to special economic policies and flexible governmental measures, which ensure an economic management system that is more appealing for firms to do business. In Chinese SEZs, investment is made without any permission from the central government. Incentives are offered to attract foreign investment and technology to SEZs,” he added.
Dr Zafar said that Pakistani policymakers need to provide incentives, infrastructure and a business-friendly environment to the Chinese investors. Chinese investors are used to such incentives at home and in other competing countries. “In this context, long-term government commitment and consistency for harmonised policies would be crucial for the success of the SEZs,” he added. –INP
