EDITORIAL: Prime Minister Shehbaz Sharif’s approval of joint venture projects between Chinese and Pakistani companies regarding relocation of Chinese industries to this country comes at a very crucial time and, if followed through properly, can do a world of good to the economy over the medium- to long-term.
Beijing is in the middle of a paradigm shift away from high-speed growth in GDP to a focus on advanced technology and manufacturing, aiming to enhance the quality and sustainability of its giant economy, the world’s second largest.
So far, Pakistan has been left out of the race to benefit from this unprecedented transfer of production even as countries like Thailand, Vietnam, Malaysia and India have benefitted; only because the economy did not have the capacity to absorb it.
But now, after the PM’s recent “special trip” to China, it seems the Chinese have finally decided to sprinkle priceless revenue generating investment opportunities over us as well. But since not much has changed about the economy over the last few years, the green light from Beijing does not automatically guarantee results.
That explains why the PM has also ordered a revision of the Special Economic Zones One Stop Shop Law in the context of this development. There is indeed great potential for relocation of China’s textile, leather, footwear, and other industries to Pakistan.
But it will remain a dream unless we are somehow able to cut bureaucratic red tape in the way of foreign investment. For some reason, Pakistan’s bureaucratic machinery remains stubbornly resistant to reform even as the economy tanks and regional competitors adapt and modify to take advantages of opportunities that we continue to ignore. Unless this thinking changes, and is reflected in progressive on-ground reforms, there’s no point in holding meeting after meeting with department after department.
For decades governments have been promising to do something about “ease of doing business”. And, little surprise, this one has also announced that a draft Ease of Doing Business Act will be sent to the cabinet committee on legislative affairs “soon”.
Now, hopefully, we won’t have to wait long to see results. Remember, this administration promised to do whatever was needed to turn the economy around when it formed government after a very disputed election. That was meant to convey a clear appreciation of the depth of the country’s economic crisis and the enormity of the effort required to overcome it.
While we’re looking to benefit from the Chinese, perhaps we might also learn a lesson or two from them. Efficiency is at the centre of the former Middle Kingdom’s turnaround miracle, after all, and if we can incorporate just this one feature into our own reform drive, that alone will suffice to trigger a sea change.
Pakistan is as ready for investment as it is desperate for it, and it’s a shame that one of the biggest and most frustrating hurdles in the way is its own rules about allowing it in. Once again, we wait to see how the PM’s initiative plays out.
Copyright Business Recorder, 2024
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