Provinces deliver, nation prospers

To say that Pakistan is faced with myriad and mounting challenges is nothing short of a gross understatement. Yet all is not bleak on the countrys economic horizon, asserted a recent study entitled sub-national doing business in Pakistan conducted by the World Bank.
The essence of the exercise, as summed up by the WB is that local-level performances are becoming increasingly important in a globalised world, where specific locations, rather than countries, compete for investment - Karachi versus Shanghai, rather than Pakistan versus China. And that is where glimmers of hope emerge for the flailing economy.
In this context, it was found that the country has made significant progress in terms of making business easier to conduct in Pakistans major cities.
According to WB, Pakistan is ranked number 83 out of 183 economies on the "Ease of Doing Business" Index and is the highest-ranking economy in South Asia in this area.
The report found that since 2007, implementation of sub-national or regional reforms in the six areas has made business easier to do in Pakistan. For instance, in Peshawar, Faisalabad and Lahore, registering a new business with the SECP now takes only two days, thanks to the introduction of e-services by the corporate regulator.
Similarly, in Karachi, the time needed to import has been halved following the implementation of an electronic data interchange system. By delegating powers to the local district level, Punjab cut 4 days from the business start-up process. The study also reveals that obtaining a building permit now takes 22 days less in Sialkot and 15 days less in Lahore due to computerisation of land records.
These are certainly positive improvements, and instil optimism to a certain degree. Yet, we can hardly afford to read too much into these findings. However, gauged against the governments plans for the devolution of many functions from the centre to the provinces, the results highlight the benefits of local reforms.
With the promulgation of the seventh NFC Award and implementation of the eighteenth constitutional amendment, provincial governments in Pakistan will have more financial autonomy, administrative control and legislative authority. Decision-making has been significantly devolved by the federation by virtue of abolition of the concurrent legislative list.
Typically, such indicators for the ease of doing business are particularly instrumental for small and medium enterprises. In Pakistan, where over 90 percent of all businesses fall in the SME sector, reforms in local administration can be the difference between a booming SME sector and rampant failure of businesses.
The inflow of foreign investments to the country is currently subdued, in part due to the precarious security situation in the country. But the assertion that investors are increasingly considering cities instead of countries as destinations for investments, offers hope to the nations economic centres.
Cities need to devise concrete and actionable plans to become more attractive to investors and businesses alike. The federal government is already in the process of devolving much from its domain to the provinces. The provinces in turn must now hit the ground running to turn their cities into magnets for industrial and commercial activity as well as investments.