• PM-appointed panel calls for measures to improve ease of doing business
• Seeks tariff overhaul to lift exports beyond $60bn in three years
• Highlights cross-cutting barriers across 20 export products
• Notes ‘policy unpredictability’ undermines investor, buyer confidence
ISLAMABAD: A body constituted by the prime minister and led by Minister for Planning Ahsan Iqbal has called for urgent reforms to improve the ease of doing business and for a serious restructuring and rationalisation of tariffs — both energy prices and trade duties — to more than double exports to over $60 billion within three years.
The committee was formed to devise a strategy for avoiding another IMF programme once the current $8.4bn arrangement expires at the end of 2027, amid mounting pressure from persistently weak economic indicators.
According to synopses compiled after week-long consultations with public and private sector stakeholders from Jan 5 to 9, the panel concluded that the current state of affairs was not capable of driving a fast-growing population of 250 million towards sustained prosperity because of cross-cutting constraints affecting “all 20 priority export products and six export drivers”.
Ironically, most of these constraints are generally well known, but the government’s inability, despite special interventions here and there, including through the Special Investment Facilitation Council (SIFC), to create a conducive working environment in a fair, equitable, rule-based and transparent manner, has hampered sustainable growth path beyond stabilisation under a restrictive programme volunteered to the IMF.
The plan proposed easing electricity and gas prices through debt refinancing and rationalising price build-ups. It was found that “export competitiveness is undermined by high and volatile energy costs, with electricity and gas tariffs remaining above regional benchmarks and subject to frequent changes”.
It warned that volatility was inflating production costs across manufacturing, agro-processing, minerals, fisheries, and services, eroding margins and diverting orders to competing countries.
The Planning Commission also pointed out that the cost of doing business in Pakistan remained “structurally high due to fragmented and distortionary taxation, inverted input tariffs, advance income tax deductions, delayed sales tax refunds and persistent working capital lockups”.
It said these issues disproportionately affected exporters and were particularly binding for small and medium enterprises across manufacturing and agri-based value chains.
The panel said that policy unpredictability was also weakening investment and buyer confidence. “Frequent changes in tax policy, energy pricing, tariff structures, export incentives and regulatory regimes, often announced late in the business cycle, constrain forward planning, capacity expansion and scaling, particularly around annual export order booking cycles,” it said.
The synopses also highlighted institutional fragmentation and regulatory burdens. They said inconsistent definitions of SMEs across the State Bank of Pakistan, SMEDA, the Federal Board of Revenue and provincial authorities restricted access to finance, incentives and support schemes. Overlapping mandates, discretionary enforcement, excessive audits and weak inter-agency coordination increased compliance costs and uncertainty, the panel said.
Moreover, exporters also faced weak domestic quality, testing and compliance infrastructure, increasing reliance on overseas laboratories for certification and testing, it said, adding: “This raises costs, lengthens lead times and elevates rejection risks in regulated export markets, constraining movement into higher value products and destinations.”
Limited access to affordable finance was also highlighted as a constraint on upgrading and value addition. The panel said export credit, insurance, guarantees, and long-term financing instruments remained underdeveloped, while high interest rates, collateral requirements, and liquidity constraints curtailed SME investment in technology, compliance, and scaling.
