Presentation to the Board of Investment

On May the 17th, 2017, the Policy Research Institute of Market Economy (PRIME) was invited by the Board of Investment (BOI) to brief them about PRIME activities and in particular their latest research on PML-N Economic Agenda Tracking Report, which consists of a comprehensive Government Policy Scorecard. The presentation was chaired by Mr. Azhar Chaudhry, Secretary BoI. Participants included BOI Additional Secretary Mr. Shah Jahan, Dr. Awais Siraj from the Prime Minister’s Performance Delivery Unit and other Directors from BOI. Ms. Ayesha Bilal, Chief Operating Officer PRIME presented the scorecard findings and other PRIME’s projects while Shehryar Aziz, Research Associate at PRIME shared project details on contract enforcement.

All participants showed a keen interest in the presentation and also provided their inputs. Some of the comments and recommendations of have been listed as follows:

  • Participants agreed that the role of think tanks such as PRIME provides a bridge between the government and the business community and other stakeholders. BOI and PRIME need to work together to improve the targets in the manifesto related to ease of doing business e.g. taxation, contract enforcement etc.
  • Concerns were shared about the methodology of the report which was duly addressed. PRIME shared that the scorecard can be used and interpreted in many ways to understand the reforms by the government in key economic indicators.
  • The scorecard should quantify targets before assigning scores. Even though the manifesto may not specify numbers, these items can be quantified by studying the PSDP document and the Annual Budget Statement. It was shared that BOI has prepared a document containing periodic FDI targets till 2025. Moreover, it was suggested that political parties should be encouraged to include quantifiable targets in their manifesto for the next elections.
  • Another suggestion was to include in the report a sector-wise analysis. Instead of commenting on the FDI or any other indicator as a whole, commentary should be included with a sector-wise break-up.
  • Regarding the scorecard item ‘Reduce the number of federal and provincial taxes’, PRIME proposed having a single body for tax collection i.e. National Tax Authority instead of multiple tax collection bodies. It was questioned whether it would be possible to achieve this after the 18th amendment has been passed. It was discussed that if the collection is done separately by each province and then pooled in then it would not be an issue.
  • Another comment was that disparity between amount announced for spending and the actual amount spent will always be there as there exists a separation of functions between the Ministry of Finance which is responsible for releasing funds, and the Ministry of Planning and Development, which devises the PSDP. This is the reason why mostly it is seen that actual amount spent on projects is but a fraction of the PSDP allocation. This phenomenon affects the scores negatively and can be addressed by either eliminating the separation of power or improving the coordination between the two ministries.
  • BOI took particular interest in the contract enforcement project and also shared their findings and efforts for improving Pakistan’s Doing Business ranking. It was observed that even though Pakistan has improved its score in Doing Business Report, its ranking has still fallen. The means that we need to catch up with other countries and learn from them.

BOI is on board to collaborate with PRIME in projects related to improved economic reforms as per the targets listed in the economic manifesto of the government, especially related to ease of doing business.  The secretary thanked PRIME Institute for briefing BOI and expressed resolve for greater cooperation between the two organizations, in future.

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