The Special Economic Zone Management Information System (SEZMIS) has facilitated the grant of the active zone status to 70 enterprises by the Board of Approvals (BOA) compared to 200 in the last eight years, according to the State Bank’s report on SEZs in Pakistan.
Potential zone enterprises have to submit an online application to purchase land from the developer and apply for zone enterprise status through SEZMIS maintained by the Board of Investment (BoI) under the latest regulations, a report by Dawn stated on Friday.
In the last eight years the foreign direct investment (FDI) committed was $1,081.7 million while in first five months (January-May 2021) of SEZMIS establishment the FDI commitments rose to $646.6m.
However, the State Bank analysed the current SEZs situation in Pakistan with comparative study of the region as well as global trend, the report said.
The central bank has suggested that Pakistan could take steps for making improvements in certain areas, pointing out that Bangladesh’s SEZ Act could be analysed for useful insights.
The two main rationales and conceptions of SEZs around the world are islands of excellence and laboratories for policy reforms.” In both these conceptions, the SEZs in Pakistan have room for improvement,” said the SBP.
“There have been some positive developments recently, such as the passing of the SEZMIS regulations, which prevent real estate speculation,” said the report.
However, that vision is yet to be fully implemented; the one stop shop has not been set up, whereas overlapping coordination functions have led to delays in provision of infrastructure and utilities.
“In addition, policy frameworks to ensure business friendly climate in SEZs with respect to skilled labour and facilitative legal environment have not been announced,” said the report.
Under current SEZ framework, all the SEZ authorities, organisations and persons engaged in the creation, development, operations and management of a SEZ are required to follow respective applicable laws and standards of Pakistan including vis-à-vis environment, employment, procurement, and building code, unless specifically exempted, relaxed or otherwise provided in the SEZ Act, it added.
“However, the current SEZ framework does not offer exemptions, with the exception of building codes,” said the report.
It contrast, Bangladesh’s SEZ Act not only exempts SEZs from various national and local government laws, but also allows the government to modify any other Act or do any other thing necessary to remove difficulties for growth and development of SEZs.