Published Date: Jan 20, 2020
Govt Should Rationalize Regulations For Flourishing Businesses: Experts
ISLAMABAD, (APP – UrduPoint / Pakistan Point News – 20th Jan, 2020 ) :Experts here at a discussion on ‘Better business regulatory environment: way forward for Pakistan’ on Monday viewed that the government needed to rationalize the excessive business regulations for achieving the substantial foreign direct investment (FDI) inflows to thrive the businesses, especially the small and medium enterprises (SMEs) in the country.
Despite improvements on ease of doing business (EODB) index, business regulations at the Federal, provincial and local levels still appeared to hinder in the way of attracting the FDI and businesses to flourish, they observed.
The discussion was organized by the Sustainable Development Policy Institute (SDPI) in collaboration with National Network of Economic Think Tanks in Pakistan.
Amjad Bashir, senior economist at International Finance Corporation, while highlighting the systemic, institutional and procedural (SIP) challenges of business regulations, said Pakistan, after the 18th Constitutional Amendment, had five different regulatory regimes, whereas at the system level, there was weak federal-provincial or inter-provincial coordination.
At institutional level, there were more than 60 regulatory agencies with heavy compliance coupled with lack of transparency and poor feedback mechanism, he added.
At procedural level, he said, there was weak automation of business processes and mostly business-related procedures were performed manually which increased uncertainty in trade and investment operations.
In order to address the aforementioned challenges, Bashir suggested developing an online portal where the government should ensure the provision of inventory of all the regulations and laws at one place, which could be easily accessible to businesses and investors.
He said that in consultation with the stakeholders, the government should validate the relevance and usefulness of all business regulations and eliminate unnecessary regulations, documentation and compliance requirements.
Moreover, there was a need to automate the compliance with business regulation and ensuring e-payments of all relevant charges, he added.
Bashir also highlighted the need for research at sector level and what difficulties each sector faced in registration and licensing, and operations at provincial and local levels.
"There remains a need to use digital technologies for reducing cost of regulatory compliance and regulatory impact assessments may be conducted at sector level to clarify costs, benefits and actual effects of regulation," he said.
Chief Executive Officer (CEO), Khyber Pakhtunkhwa board of Investment and Trade (KPBoIT) Hassan Daud Butt said previously the vision of KPBoIT was mainly focusing on attracting the investments, particularly, FDI and there was little focus on the ease of doing business.
He said as part of the prime minister’s initiative on de-regulation of businesses, the KPBoIT had developed its industrial policy which embedded the EOBD and likely to be presented to the Cabinet next month.
To rebrand the KP’s business outlook, "we have done mapping of all business regulations and duplication of any NOCs by engaging all stakeholders and trying to improve the pre-investment business environment", he added.
Joint Executive Director, SDPI, Dr. Vaqar Ahmed said that the research indicates that large and growing firms in Pakistan would like to see quick improvements in better enforcement of business contracts and getting credit.
He said that greater efforts are required to improve dispute resolution mechanisms available to the business community.
The foreign investors would require confidence, as they have witnessed their peers resorting to International Centre for Settlement of Investment Disputes’ for claiming their entitlements � a practice which only comes in to force once the country’s own dispute resolution mechanisms do not deliver, he added.
Dr. Vaqar said that such improvements in business climate could be termed as a necessary but not sufficient condition for increase in future investments.
"The need now is to understand the inventory of regulations by sector and then rationalize or eliminate any unnecessary regulations which hurt business growth", said Dr. Vaqar adding this reform momentum needs to be maintained through regulatory easing, improved coordination across federal, provincial and local tiers of the public sector, shared understanding between the government and regulators, and continued public-private dialogue.