PIDE Commentary: PM’s Committee on Ease of Doing Business

On March 23, 2024, the Prime Minister of Pakistan established a Committee on Ease of Doing Business (CoEDB). Led by the Federal Minister of Investment, Privatization, and Communication, the committee is tasked with developing strategies to increase both domestic and foreign investment by improving the ease of doing business. The committee was given 15 days to outline these strategies.

After two consultative meetings, the committee finalized its vision and terms of reference. The vision statement declares that Pakistan is embarking on an exciting reform journey, transitioning from a consumption-led growth and import substitution model to an export-led growth model. The finalized terms of reference (TORs) are as follows;

1. establishing an investment single window, leveraging ICT for integration of all investment-related requirements,
2. developing a single investor interface on the model of Pakistan Single Window (PSW),
3. cleansing redundant and cumbersome regulatory requirements for investment to undo unnecessary licenses, permits, NOCs, and permissions within one year,
4. improving Pakistan’s doing business environment to appear in the top 10 economies in the World Bank’s B-Ready Report within three years,
5. harmonizing provincial regulations, and processes for a uniform national-level investment facilitation framework.

To achieve these TORs, the proposed framework includes the adoption of an Asaan Karobar Bill, developing an e-registry, creating the National Regulatory Delivery Office (NRDO), and establishing the Pakistan Business Portal.

On the Ease of Doing Business Committee

PIDE notes that:

• Initiatives like forming such a large committee have been experimented with numerous times without any tangible improvements in the outcomes. PIDE opines that such exercises are a waste of time and resources.
• The 24 members of the committee comprise primarily bureaucrats, politicians, and donors. Although Pakistan is creating a business portal to facilitate business activities, no businessmen/local investors/entrepreneurs are involved in the committee. Additionally, no research institutes, think tanks or local academia are included to provide an independent perspective.

• The composition of the committee itself raises concerns about its effectiveness. While including top bureaucrats and ministers may provide strong optics, in practice, convening meetings with such members is often challenging in Pakistan. Traditionally, these high-profile members may attend initial meetings, but over time, it has been observed that their participation wanes, rendering the forum nearly ineffective. Since proposed members already serve on various boards and committees, raising concerns about time allocation and potential conflicts of interest.
• The committee lacks subject experts and full of politicians and bureaucrats who are going to seek the political way out which will mostly be in line with vested interests.
• The committee has also consulted six experts, including two foreign consultants, to finalize the strategy. These key experts have strong connections with donors, which means they do not have the skin in the game and lack direct stakes in the outcome.
• The proposed committee lacks any input from the local academia, civil society, competition and legal experts, and the business community.
• The Competition Commission of Pakistan (CCP), dedicated to promoting competition and fair play for businesses, has not been included in the committee. PIDE notes that since CCP is a key stakeholder in this regard, it should be a part of the committee.
• Experiences from the success stories indicate that having a transparent process is critical to implementing such reforms effectively. However, transparency concerns have not been addressed in the committee’s functioning or the proposed strategy.
  • Will there be minutes of every meeting of this CoEDB meeting made public after every meeting?
  • Will the material being given to the committee for action be prepared through adequate research and by who?
  • Will that material be shared with the public?
  • Will the researchers of the background material of the committee subject themselves to local peer review?
  • Or will it be a black box and consultant-driven?

PIDE notes that such reform (all reforms) requires substantial domestic dialogue and ownership by the domestic research community. Most of our reforms fail because of the lack of transparency, and inadequate consultation with the local community, especially academia, and are mostly driven in the dark by a foreign consultant whom nobody knows at home.

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