Ayesha Saba

Pakistan can learn from the Chinese experience in speeding up the development of the Special Economic Zones (SEZs) for accelerating industrialisation. In this regard, Dr Talat Shabbir, Director of the China-Pakistan Study Centre at the Islamabad Strategic Study Institute, said: “As Pakistan has entered the second phase of the China-Pakistan Economic Corridor (CPEC) focusing on business-to-business cooperation, the SEZs have a pivotal role to play in attracting investment, promoting industrialisation, increasing market accessibility and regional connectivity.” Talking to WealthPK, however, he said the success of SEZs depends on a clear set of objectives, including their characteristics, comparative advantage and location. “Chinese SEZs, which are regarded as among the best in the world, have clearly defined these objectives,” he added. “For instance, if an SEZ’s primary objective is to generate jobs, then policies must be geared toward establishing labour-intensive industries,” he said, adding if the goal was to increase exports or transfer technology, then a policy framework should reflect these objectives.

“Likewise, SEZs will be more successful if they are developed as per the national industrial policy,” he maintained. Talat Shabbir said as Pakistan differed significantly from China in many ways, including in its government form, organisational system, leadership quality and cultural values, the question was whether Pakistan could learn from China’s experience in the development of SEZs despite these differences. “The development of SEZs must be aimed at improving the overall business climate in the country. This can be done through improved infrastructure and trade facilitation to attract investment from foreign and domestic firms.” He stressed that Pakistan must overcome political upheavals as early as possible. “It is also vital that the government commits itself to a long-term strategy for growth.” He said SEZs must be governed by separate laws and institutional structures within the national legal framework.

“Otherwise, very little FDI will flow in from China and other economies, which will not allow Pakistan to realise its export potential and developmental objectives,” he added. Talat Shabbir said that it was imperative that the province where an SEZ was located had a policy in place keeping in view its priorities and workforce potential to optimally benefit from the initiative. “CPEC is definitely a game changer for Pakistan, but it’s also a test of our ability. It all depends on our capacity to figure out how to maximise the advantages it offers in terms of foreign investment.” “Pakistan should enhance its capabilities and competitiveness by focusing on extensive research and development, and study global market trends and demand patterns to identify the sectors that have the potential for growth in international markets,” the director of the China-Pakistan Study Centre stressed.

Credit: INP-WealthPk