Ayesha Saba

There is a need to focus on the operationalisation of existing special economic zones (SEZs) rather than establishing new ones for Pakistan’s industrial development.Speaking to WealthPK, Dr Hassan Dawood Butt, former project director of CPEC and senior adviser at Sustainable Development 

Policy Institute (SDPI), said that SEZs have long been heralded as a cornerstone of economic development, aimed at spurring industrialisation, attracting foreign investment and creating job opportunities. He highlighted that the underutilisation of existing SEZs has been a recurring challenge in Pakistan’s industrial policy. He stated that Pakistan’s SEZs have yet to reach their full potential, partly due to infrastructure limitations and the need for improved stakeholder coordination.

Butt further emphasised that providing essential utilities is a key step in making these zones more viable and attractive for investment. He also called for aligning the rules of technology zones with those of economic zones to create synergy and drive innovation-led growth. He recommended adopting a performance-based model for SEZs, where zones demonstrating higher efficiency and return on investment are prioritised for additional support.

“Encouraging public-private partnerships and implementing digital platforms for regulatory compliance could further enhance the ease of doing business in these zones.” Butt stressed the implementation of structural reforms that could transform these zones into engines of economic growth, aligning with the country’s broader industrial and trade strategy. Zafarul Hasan, Joint Chief Economist at the Planning Commission of Pakistan, said: “We have made significant progress in building the necessary infrastructure and stabilising the energy supply, setting the stage for more focused economic reforms.”

He added: “The CPEC’s second phase is seen as more crucial as it focuses on industrialisation through the development of SEZs. Four SEZs are currently in the development phase, which are expected to play a pivotal role in attracting foreign direct investment and fostering economic growth.” “Pakistan has already made strides in developing several industrial parks under the CPEC initiative. A successful example is the development of Allama Iqbal Industrial City in Faisalabad, which has attracted significant FDI in various sectors, including textiles, pharmaceuticals, and engineering,” Hasan noted.

“The success of industrial parks in attracting FDI heavily depends on local conditions, including political stability, infrastructure quality, and skilled labour availability,” he emphasised. “We must adopt a tailored approach, focusing on sectors where Pakistan has a competitive advantage, such as textiles, agriculture, and information technology,” the Planning Commission official suggested.

Credit: INP-WealthPk