The Board of Investment (BOI) has undertaken significant reforms to create an environment in which private businesses, investment, and trade can thrive. Talking to WealthPK, Additional Secretary for Reforms at the BOI Ms Ambreen Iftikhar said the Pakistan Regulatory Modernisation Initiative (PRMI) was the country's toolkit to create a business and investment-friendly environment. “In many developing nations, including Pakistan, the SME sector has faced persistent challenges, preventing it from realizing its full potential. As a result, SMEs' contribution to the country's economic development remains below its optimal capacity,” she said. “The business community is being adversely affected by excessive regulations, highlighting the pressing need for regulatory reform. The primary goals of the PRMI are to alleviate regulatory burden on businesses and enhance the efficiency of the regulatory framework,” she said.

“It helps the government departments and regulators learn from global best practices for private sector development and spur cross-fertilization of ideas across all provinces and departments,” Ambreen added. “Under PRMI, the apex regulators have made historic reforms to streamline bottlenecks for start-ups. The majority of these reforms have come up with good results testifying to the investors’ trust,” she informed WealthPK. According to WealthPK research, PRMI envisions establishing the Pakistan Business Portal, a one-stop shop (OSS) for all business-related interactions with government departments and regulators.

Former chairman of BOI Haroon Shareef told WealthPK, “The ease of doing business culture in Pakistan plays a vital role in promoting industrial growth, which shows a positive reflection towards the country’s exports. The investors not only sought clear policies but also stability and consistency.” He said the private sector served as an engine of growth, adding that many investors had left Pakistan due to over-regulation, which they did not face in other countries. “The responsibility of the state is not to run businesses but to provide ownership and incentives to the private sector. In order to bring in investors, there is a need to resolve the governance issues, provide a mechanism for dispute resolution, and assure investors that their investments would be secure and without any unwanted interference by the government,” he opined.

“Supporting SMEs through tailored policies, streamlined processes, capacity building, and market access initiatives is a strategic move by the BOI. Such measures, when executed adeptly, can foster a thriving SME ecosystem, spur private domestic investment, and propel the country towards sustainable economic growth and prosperity,” he said. “It is imperative for the BOI to remain committed to these efforts and continually upgrade its approach to meet the evolving needs of SMEs in Pakistan,” he opined. “Local investment cannot increase unless the industrial problems are resolved,” he emphasised.

According to the Economic Survey of Pakistan, investment accounts for 15% of the country’s GDP, which is quite low. The share of private investment is only 10%. The net foreign direct investment (FDI) in Pakistan was $2.6 billion in 2019-20, which decreased to $1.82 billion in 2020-21 and stood at $1.87 billion in 2021-22.

Credit: Independent News Pakistan (INP)