Senators want more specific legislation to lure genuine investors
Lawmakers across party lines have agreed to introduce some changes in the proposed legislation to engage people who want to invest at the micro level for promotion of industrial infrastructure. The draft law encompasses an incentive package and policy framework for establishment of special economic zones (SEZs).
Chairperson Senate Standing Committee on Law and Justice Senator Kazim Khan said the bill might be misused by wealthy industrialists in a meeting convened to discuss its pros and cons on Saturday. Passing the bill in its current form may lead to a race among the wealthy to acquire state land on lease, he added.
“Therefore, industries which are not generating jobs for people must be excluded from tax exemption and public interest should not be compromised in any way.” The bill aims to promulgate a law for development of special economic zones through legal provisions to create new industrial hubs.
“Some crucial amendments which define zone admission criteria should be added to it,” Senator Saeeda Iqbal told The Express Tribune. “The proposed bill does not serve the purpose of generating more jobs for people.”
Lawmakers, who attended the panel meeting, advised Chairman Board of Investment (BOI) Saleem Mandviwala to remove obstacles in the way of foreign investors. “Encourage seasoned investors rather than promoting new experiments in business,” said Pakistan Muslim League-Nawaz Senator.
Mandviwala informed the committee that obstacles could not be removed because they served the interest of several ministries. “Self-regulatory organisational culture has caused irreparable loss to industry,” he said. “New legislation may improve the status quo.”
The committee decided to invite heads of chambers of commerce and industry to the next meeting and solicit their input. It has also asked the BOI to give an update on Small Industrial Zones in the next meeting. Chairman Senate Farooq H Naek had referred the bill to the Senate Standing Committee on Law and Justice when it was first introduced in the Senate in July.
Published in The Express Tribune, October 3rd, 2011.
COMMENTS (3)
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The concept is excellent. However private investors include a number of factors in their risk/reward calculations and the elephant in the room is the violence/terrorism/ and perceived instability of the government which outweigh the specific benefits of an "economic zone".
Under the provisions of this law, all investors must extend power lines from their countries cause the Govt can assure only 4 hours of electricity a day.
Despite the tremendous advantages that Pakistan continues to offer overseas investors, many in the government bureaucracy are simply not bothered about responding to inquiries about requirements for setting up production facilities. Where case numbers are automatically generated in response to inquiries, in my experience that is often the extent of government involvement. Periodic benchmarking of government effectiveness is needed to identify problems and create solutions.
A big problem is corruption among the people responsible for attracting international businesses. These bad apples sabotage the work of the many good people in government who are trying their level best to advance the nation. One solution would be to list contact information (on every government website) for an inspector general who could be contacted to report inaction and corrupt practices.
Last but not least, look at the mistakes India is making and avoid them. Chief amongst these is the issue of restricting modern communications. India tries to ban voice over Internet (VoIP) telephony, which businesses rely on to integrate their global operations.
Banning VoIP is meant to direct boost revenues for old-fashioned telephone companies at the expense of global competiveness. To force a modern enterprise to segregate out their South Asian operations from their global teams is a self-sabotaging disservice with far reaching consequences.