Syed Muham­mad Shab­bar Zaidi

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Zaidi stated that Pak­istan is one of the few coun­tries in the world to give full pro­tec­tion to for­eign in­vest­ment, but he made an im­por­tant dis­tinc­tion, that these govern­ment poli­cies, in prin­ci­ple ac­cepted and pro­moted pri­vate sec­tor eco­nomic de­vel­op­ment but have been un­suc­cess­ful in cre­at­ing a ‘vi­brant environment’. He men­tioned a host of prob­lems and is­sues fac­ing the ‘or­ga­nized’ pri­vate sec­tor, lead­ing to a down­ward trend of un-cor­po­ra­ti­za­tion which in­cludes: 1. Un­even play­ing field against the

un­or­ga­nized sec­tor. 2. Fre­quent un­nec­es­sary amend­ments in trade, mone­tary and fis­cal poli­cies. 3. Non-avail­abil­ity of trained hu­man cap­i­tal and com­plete ab­sence of govern­ment sup­port and role in this field. 4. Bu­reau­cratic and po­lit­i­cal in­ter­fer­ence in reg­u­la­tory au­thor­i­ties like OGRA, PEMRA, SECP, SBP, FBR, etc.

He de­nounced the pro­tec­tion­ism against cre­at­ing com­pet­i­tive­ness and sug­gested the use of lo­cal strengths. “We must ad­dress is­sues en­cour­ag­ing un-cor­po­ra­ti­za­tion such as high tax rates, ex­ces­sive, cum­ber­some and oper­a­tionally in­ef­fec­tive reg­u­la­tions, labour levies and ‘in­cre­men­tal cost of do­ing busi­ness’, lack of “In­sol­vency” laws and so­cial taboos against busi­ness fail­ures and for­eign ex­change regime op­er­at­ing with­out in­cen­tives for cor­po­rate sec­tor.

Zaidi sug­gested de­tailed mea­sures for im­prov­ing in­vestor con­fi­dence through con­sis­tent eco­nomic poli­cies, po­lit­i­cal and so­cial sta­bil­ity and sus­tained high growth. There is a need to re­verse the or­der of poli­cies some of which af­fect the pri­vate sec­tor ad­versely like high in­ter­est rates, 30 per­cent tax on en­ergy, im­proved in­fra­struc­ture, se­cu­rity, etc.

On the way for­ward, Shab­bar Zaidi sug­gested the fol­low­ing: 1. Medium and long-term ‘po­lit­i­cal con­sen­sus’ on fun­da­men­tal eco­nomic poli­cies. 2. Eco­nomic pol­icy fo­cused on poverty al­le­vi­a­tion, full em­ploy­ment and cre­at­ing a sus­tain­able man­u­fac­tur­ing sec­tor and pub­lic so­cial se­cu­rity net­work. 3. Greater govern­ment in­volve­ment in pro­vid­ing ed­u­ca­tion, health, in­fra­struc­ture and se­cu­rity. 4. Govern­ment fo­cus on pro­vid­ing sup­port mech­a­nism in sup­ply of en­ergy and lo­gis­tics. 5. Min­i­mize reg­u­la­tory frame­work. 6. De­cen­tral­iza­tion of Tax Col­lec­tion

Sys­tem. 7. In­vest­ment on in­ter­nal se­cu­rity. 8. Strongly em­pow­ered lo­cal Ad­min­is­tra­tion for big cities to help turn them into en­gines of ‘in­dus­trial’ growth. Ac­cord­ing to Zaidi, an ‘Or­ga­nized Pri­vate Sec­tor’ must oper­ate in­de­pen­dently, with a clear and crisp long-term eco­nomic vi­sion as there is no al­ter­na­tive model

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