Improving business environment in Pakistan

It is not easy, in fact very hard, for people to do business in Pakistan. The extent of difficulty of doing business in Pakistan could be imagined by the fact that people have to deal with 40 regulatory bodies in order to open or run business in Pakistan. Improved business environment will result in business growth which will further lead to economic prosperity.

TRTA II Programme commissioned Dr. Simon White, International Expert in Business Environment Improvement, to identify opportunities for supporting business environment reform in the selected sectors through a review of Programme documentation and consultations with the stakeholders. Dr. White undertook a mission to Pakistan to consult with key actors and to identify two pilot BER projects that the TRTA-II can support.

During the meeting with Additional Secretary MoC, Mr. Azher Ali Choudhry requested TRTA II to look into the dairy industry as well, as this sector faces many micro and macro level constraints yet has a potential in terms of both international and domestic markets. He also informed the TRTA officials that MoC was going to conduct a case study on dairy sector to complement those done by the TRTA-II Programme in 2012/13.

During the meeting with MNFSR the Secretary confirmed the lack of marketing skills, high percentage of product wastage and low level of mechanisation in the agro-industry with no provision of outreach services, leading to further unemployment. At the same time MNFSR appreciated the work that TRTA II had done to support Pakistan in the areas of food safety and SPS through activities with the Punjab Food Authority and the launch of an internationally recognized and accredited PGD Course in Food Safety & Controls at three local universities.

With reference to other agencies/donors working it the area of business environment, TRTA learned that DFID has provided funds to IFC to support the establishment of an Investment Climate Reform Unit (ICRU) in Lahore. The unit will commence with a thorough mapping of laws, regulations and procedures.

The FPCCI informed the mission that consultations between the federation and the government on issue related to business and trade policy formulation are held frequently. However, FPPCI indentified other business constraints like branding and supply chain management.

As a mechanism to help address disputes amongst businesses in Pakistan, LCCI, with the help of IFC, has established an Alternative Dispute Resolution system, which use peer pressure to help resolve business disputes. This system, however, is not binding and is purely used on a volunteer basis. The IFC helped train 20 LCCI office bearers to provide quality mediation services. So far, the mediation centre has resolved 40 cases with most number of cases emanating from the textile sector. A similar system has also been setup at KCCI in Karachi.

After thorough consultations with the stakeholders and analysis of the constraints faced by businesses in Pakistan, TRTA II Programme proposed to development a business advocacy agenda for the horticulture sector. It was also proposed to improve access to dispute resolution in the horticulture sector. This would improve the knowledge of commercial disputes in the horticulture sector while building the capacity of the mediation centres in Lahore and Karachi.