The Prime Minister has been announcing pragmatic and much needed incentives for industries, in general, and exporters, in particular. However, the basic view is that the thirst of exporters is rarely quenched, and like the American mantra during the Global War on Terror, it is always to “do more”. Over the decades, incentives, subsidies, and giveaways have not transformed into substantial increase in exports.
Pakistan is entering into the eight decade, and exports are still inching at a snail’s pace. There is definitely something missing in the export ecosystem. Export targets are not achieved if the exporters are not attuned to countering issues such as wastage control, men and machine efficiency and productivity, intensive marketing in the global markets, and highly reliance on external financing.
Maybe that is why the government is strategically announcing piecemeal incentives instead of an all-encompassing encouragement package. These incentives for industry and exporters are often insufficient in scale and design to generate the growth levels being targeted.
There are a number of factors delaying the announcement of an all-inclusive industrial policy while stakeholders are not sure when to realistically expect it. A comprehensive industrial policy has many relevant factors that are imperative if an enlightened facilitation ecosystem is envisaged. First and foremost is to categorise those products or commodities in which Pakistani exporters have the required expertise and wherewithal to operate successfully, especially without government handouts. Those days are gone when the government would hold the hands of industrialists. Therefore, a solid industrial policy should factor in (a) maximum use of indigenous resources, (b) focus on growth of SMEs, (c) fast-track establishment of Special Economic Zones, (d) affordable and available infrastructure, (e) creating business support services such as bank financing, elimination of redundant and overlapping rules and regulations, digitizing the government offices and agencies, (f) rationalizing rates and charges of transportation and Ports, (g) tax credits to encourage documented employment (h) substantial reduction in taxation rates, and (i) drastic decrease in audits, inspections, and checking. The downside is that the official architecture is structured in such a complex way which makes it complicated for the government to announce an all-embracing industrial policy. Finance Minister Muhammad Aurangzeb once stated that Pakistan doesn’t need too many policy prescriptions; it just needs to implement these policies.
To achieve the objectives of targeted growth, investment, foreign exchange inflow, and employment, the government has to possess political will and that is possible if the influence of elite capture and vested interests are ignored to a large extent. Another condition is that the government lacks economic security because of over-dependence on heavy external and local borrowing, inability to broad-base tax collection, and blatant misuse of financial resources.
The third point is that economic diplomacy and trust have not been effective in real time in attracting investment from here and abroad and hence it has not been able to convince investors that the country is open for business and industrialization. At the same time, foreign businesspersons should be given on-arrival visas. Why is this facility only for diplomats and government officials? Just announcing a Business Policy is superfluous if the government is not fully adapted in catering to the prerequisites of the investors.
Newspapers and social media keep hammering up items such as a large number of industries and businesses shifting to Central Asian States, such as Uzbekistan, or debt servicing soaring past defence and development spending, or a large number of talented Pakistanis migrating for a better future, or laid-down policies not being implemented, or multinationals closing shop or selling their business lock, stock, and barrel to local investors, or wishy-washy solar energy policy, or external and internal threats by terrorists and proxies of foreign governments are a debilitating matter of concern for investors, or shift from industrial investment into the booming stock exchange, etc. A positive news is that, for whatever reason, PIA was at last privatized.
Hopefully, this will spur the privatization process and maximum number of state-owned enterprises will be sold off rapidly and stop the hemorrhaging of state revenue.
Implementation of any policy is a two-way street. The private sector too has to be proactive and ensure success of any policy which is beneficial to business as well as the nation. To achieve the objectives of a real-time business policy, it is important to state that the business community has a role to play in so that more and more industrialists and traders move towards more honest business operations and more ethical practices of tax and other financial obligations.
Private sector must focus strongly on these responsibilities. It is obligatory upon the leadership and office-bearers of Chambers and Trade Associations to forcefully promote transparency, documentation, and adherence to law of the land. It goes without saying that some leaders are unable or maybe do not have the critical mass to convince their members to change their prevalent mindset.
The fact of the matter is that complacency, lack of imagination, or accepting the status quo are hallmarks of any ordinary entrepreneur. However, over the decades, a large number of Pakistani industrialists have proved their mettle, not only in their units and products, including innovations, but also in corporate social responsibility.
Real time innovation, earned acumen, and being a step ahead of global competitors must be built in qualities of the new and established entrepreneurs, whether of SMEs or even large factories. This is one recipe for economic development and economic prosperity.
There is an ice cream that originated in Italy. It is called “Cassata”. It is usually a three-in-one that has sponge cake, fruits, and ice cream. The private sector is like a sponge cake, absorbing and taking in the fruits which are government policies, and outcome of these is the ice cream which is the prosperity of Pakistan. The time to prepare this ice cream is now.
Copyright Business Recorder, 2026
The writer is President Employers Federation of Pakistan