Importance of special economic zones

Now when we see the assent accorded to the parliament-adopted Special Economic Zones Bill 2012, by President Asif Zardari who signed the Bill during a special ceremony held at the Presidency on September 10 last, we are reminded of the advanced economic initiatives undertaken by the Islamabad regime with the objective of realising the higher economic goals with international co-operation.
People, who are well aware of the special economic zones project, opine that it is a major step towards enhancing business competitiveness in the country as it would help in reducing the cost of doing business and in also minimising the cost of production. The countries that have been able to enhance business competitiveness have made tremendous economic strides in the present-day international market. Being competitive is now number one priority of advanced economies. Pakistan is doing its best and taking all practicable and speedy measures to achieve this target and create a niche for itself in the world economy. Even during the recent Pakistan tour of Indian Foreign Minister, S M Krishna, visa regime was softened for many categories of citizens with greater facilities of multiple visas being decided for business community.
The aim was trade expansion between natural neighbours (there is lot of potential in this region, to the tune of billions of dollars). And whenever President Zardari happens to be in any country, his stress on most of the occasions is on trade (read trade expansion). It has also been confirmed by economic experts that the special economic zones would provide the much needed impetus for augmenting investment and economic activities in Pakistan, thus laying new foundations for industrial development in the country. Other benefits that are going to accrue out of this endeavour are boost in foreign investors' confidence followed by improved investment inflows in the country for which the government is contemplating enhancement in the rate of return for investors.
Results have already started pouring in with friends like China and Turkey taking the lead in this area. China has already offered to set its economic zones in Pakistan, whereas Turkey is also interested and the Pakistan government has also started negotiations with Japan for establishment of these zones. These initiatives and negotiations are being carried out at good pace with the idea of enabling Pakistan to increase its exports further besides broadening its employment base.
The incentives' package announced under the Special Economic Zones Bill 2012 includes one-time exemption from customs duties that would be granted on capital goods, machinery and equipment. The entrepreneurs of special economic zones would also be exempted from income tax for 10 years. However, no tariff advantages will be provided, except on capital investment. And in order to address the investors' concerns effectively, the incentives granted to the investors would be protected by law. This would ensure the continuity of economic policies in the country allowing the investors to work without any apprehensions of changes or withdrawal of incentives (as has been often happening in the past, resulting in the flow of capital from the country to other parts of the world). This law extends to the whole of Pakistan and allows establishment of SEZs anywhere in the country over a minimum area of 50 acres. And, under the Bill, old investments like existing industrial areas can also be declared as SEZs, thus ridding the country of the old, redundant style of excluding the ongoing projects and industry from new schemes.