Belgian-British economist stresses need for effective industry policy in Pakistan

ISLAMABAD: Professor Stefan Dercon, a Belgian-British economist, emphasised that an effective industrial policy should strike a balance between providing protection to industries and offering incentives to boost productivity.

The economist met on Tuesday with Special Assistant to the Prime Minister for Industries and Production Haroon Akhtar Khan.

During the meeting, they discussed key economic issues including macroeconomics, foreign reserves, exports, imports, and the need for an effective industrial policy.

Both Professor Dercon and Haroon Akhtar Khan engaged in a detailed conversation about the current challenges and opportunities facing Pakistan’s economy. Haroon Akhtar Khan highlighted that Pakistan lacks a formal bankruptcy law and an industrial policy, which are essential for the sustainable growth of the industrial sector. He stressed that a comprehensive industrial policy is urgently needed to improve the performance of industries.

The special assistant also pointed out that high tax rates and expensive electricity tariffs have negatively impacted the industrial sector in the past. He reaffirmed the prime minister’s commitment to reviving sick industries and restoring their productivity to contribute to the country’s economic growth.

Professor Dercon emphasised that an effective industrial policy should strike a balance between providing protection to industries and offering incentives to boost productivity. He noted the importance of having a consistent policy framework to help Pakistani industries compete effectively in the regional market. Additionally, he advocated for special incentives to be extended to productive industrial sectors to encourage further growth.

The economist also discussed the impact of customs tariffs on local industries and exports, highlighting the need for reforms to support economic expansion. Haroon Akhtar Khan concluded by stressing that investment in the industrial sector is crucial for achieving sustainable economic growth in Pakistan.

Copyright Business Recorder, 2025