The pivotal role of private sector in fostering the development of any economy is by now beyond any dispute and a well-established empirical outcome. Over time, governments worldwide have increasingly embraced the role of a forward-thinking regulator, dedicated to enhancing the overall business climate and regulatory environment. This strategic shift empowers businesses to thrive and compete organically, yielding multifaceted benefits such as increased employment opportunities, enhanced revenue streams, and accrual of valuable foreign exchange.
In Pakistan’s context, particularly in the wake of the groundbreaking Constitution (Eighteenth Amendment) Act, 2010 [“18th Amendment”], there is an amplified need for both provincial and federal governments to collaborate proactively and seamlessly. A harmonized and synchronized approach is essential to lay the foundation for a resilient economy. This approach allows merchants the freedom to leverage business-friendly policies and capitalize on the distinctive geographic and natural advantages that each province may offer. By fostering such collaboration, Pakistan can unlock the full potential of its economic landscape, promoting growth, innovation, and prosperity.
A persistent challenge in this context lies in the erratic and unpredictable enforcement of laws, rules and regulations, notably following changes in government. The prevalent ad-hoc approach has left various industries and businesses vulnerable to heightened risks, precariously placing their investments. The absence of a robust regulatory control and its continuity has contributed to an atmosphere of uncertainty, making imperative the demand for a more stable and consistent framework to safeguard the interests of industries and businesses amid transitions in governmental leadership.
Similarly, the synergy among diverse government entities and within individual jurisdictions remains conspicuously missing. Businesses find themselves navigating through various departments at both provincial and federal levels for any transaction, be it financial or non-financial. Addressing this inefficiency necessitates a significant reform in coordinating bodies across different jurisdictional levels.
It thus becomes essential for these bodies to be proactive and arrange joint meetings involving all stakeholders within each business domain. Such a collaborative approach, aims at systematically ironing out anomalies, streamlining processes that can foster a more conducive environment for businesses. By achieving better interdepartmental communication and coordination, a more efficient and business-friendly, landscape can be cultivated, improving overall ease of doing business.
Unfortunately, our government departments have not kept pace with the rapidly evolving needs of the modern world. It is evident that they are hugely lagging behind in aligning themselves with the dynamic growth of local businesses in Pakistan. The existing policy gaps and practical ineffectiveness pose substantial obstacles to providing an environment for prosperity.
In the global landscape where technology spearheads transformative reforms, Pakistan must proactively embrace this change. Technological integration is indispensable in eliminating inefficiencies and redundancies within governmental processes, leading to operational efficiency. Embracing technology-driven reforms is not just a necessity, but also a strategic imperative to propel Pakistan’s bureaucratic machinery into a more responsive and adaptable entity, better aligned with the contemporary worldwide demands of businesses.
In today’s interconnected realm, where countries are more intertwined than ever, optimizing international trade processes across borders is essential. Inefficiencies at domestic level can ominously affect investment decisions and hinder export potential. Streamlining cross-border operations is paramount in ensuring a seamless and efficient global trade. Hesitation in resorting to technological solutions often translates into reliance on paper documentation and cumbersome customs and border management protocols causing suboptimal port operations and jeopardizing a nation’s competitiveness.
According to the World Bank’s Ease of Doing Business Report published in 2020, Pakistan ranked 108 out of 190 countries. While discussing Pakistan’s position on the ‘Trading Across Borders’ factor, the report highlights that it takes 55 hours for documentary compliance and 58 hours for border compliance for export related matters, whereas for imports, it takes 96 hours for documentary compliance and 120 hours for border compliance formalities. These statistics that have not changed much till the end of 2023, underscore the urgent need for technological advancements to streamline trade processes, reduce bureaucratic hurdles, giving Pakistan better opportunities to engage in international trade.
For addressing the above challenges, the government in 2017 introduced Pakistan Single Window (PSW) initiative. This Integrated Digital Platform serves as an innovative solution allowing all parties engaged in trade to submit standardized information and documents through a single-entry point. Pakistan Customs, at the forefront of innovation, is leading the charge with the PSW initiative to revolutionize the cross-border trade landscape in Pakistan. This ambitious project is focused on digitalizing operations and removing outdated manual paper-based processes. The core objective is to significantly reduce the time and cost associated with conducting business.
The PSW operates as a comprehensive framework, harmonizing Customs and regulatory processes pertaining to the clearance of import, export, and transit goods. Serving as a unified “one-window” solution, it adds value and efficiency for various stakeholders, including government bodies, traders, port operators, ground handling agents, freight forwarders, transporters, and shipping agents, ushering in a new era of streamlined and efficient trade practices.
Singapore stands as a notable example and a frontrunner in the successful execution of a single window solution in resolving issues related to import and export operations. The TradeNet system, a flagship initiative, has been instrumental, processing over 24,000 trade declarations daily. This efficient system accomplishes a remarkable feat by handling 99% of permits within a mere 10-minute timeframe, exemplifying Singapore’s commitment to expeditious and streamlined trade processes. Furthermore, the system facilitates seamless collections through interbank deductions, accentuating its robust and sophisticated design. Singapore’s exemplary success in implementing a single window solution serves as a benchmark for governments worldwide desirous of achieving similar objectives.
Likewise in Europe, the computerization journey of Port of Hamburg in Germany commenced in 1982 with the establishment of its port community system, known as DAKOSY. Considered a landmark accomplishment, it has since evolved into a fully “paperless port.” By 2017, DAKOSY had transformed into the port’s single window platform, boasting a network of over 10,000 stakeholders connected to its Single Submission Point (SSP). This comprehensive framework facilitates seamless exchange of business data for all logistics, companies and authorities engaged in export, import, and transit processes through its centralized data center. DAKOSY serves as an inclusive platform benefiting shipping lines, rail transport companies, trucking companies, feeders, international trade firms, and industrial enterprises.
Pakistan must undertake concentered and pragmatic efforts to attract foreign investment. Beyond elevating ease of doing business ranking, we should also address internal challenges, particularly political instability. Internal conflicts are depleting vital resources, forcing us to lag behind in the region. In today’s Fourth Industrial Revolution, where technology eclipses traditional approaches, Pakistan must take proactive steps. Technological advancements will enhance competitiveness, positioning Pakistan among forerunners on the global economic landscape.
(Huzaima Bukhari & Dr. Ikramul Haq, lawyers and partners of Huzaima, Ikram & Ijaz, are Adjunct Faculty at Lahore University of Management Sciences (LUMS), members Advisory Board and Visiting Senior Fellows of Pakistan Institute of Development Economics (PIDE). Abdul Rauf Shakoori is a corporate lawyer based in the USA and an expert in ‘White Collar Crimes and Sanctions Compliance’. They have coauthored a book, Pakistan Tackling FATF: Challenges and Solutions)
Copyright Business Recorder, 2023