Thread by @nabeelaq

Pakistan has an IT exports target of $5B for year 2023 and a national exports target of $46B for year 2025. Without making infrastructural changes and providing sector-wide facilitative catalyst, Pakistan will miss out on this opportunity.

This is why #Pakistan needs SEZs...

2. The onset of #COVID has affected the global economy. As a result of the lockdowns imposed to control the spread of the virus, our exports fell March 2020 onwards to as low as $0.96B. A regional comparative view shows a decline of 13.7% & 17% in exports of India & Bangladesh.

3. Pakistan is amongst one of the few countries that witnessed an ⬆️ in exports post-lockdown; on a month on month basis, this figure ⬆️ 26% to $2B in July 2020. The overall trade balance reduced by -14.7% as it stood at $1.542B in July 2020 compared to $1.8B in July 2019.

4. Low value-added nature of exports has been a consistent limitation. This includes: lack of focus on developing human capital, lack of emphasis on industry-wide standardisation, poor linkages b/w high-tech industries & pvt sector, & limited access to regional markets.

5. One policy option is modernisation of the primary sector. Eg: learnings from the Green Revolution of the 70’s can be utilized for agriculture. It contributes 18% to the GDP & constitutes 75% of total exports revenue.
The debate remains of small landholding vs large holdings.

6. The second option is to diversify the economy as per global trends & upcoming market demand. It means developing the local structure for varying sectors to gain competitiveness. Chile, for example, exports more than 2,800 distinct products to more than 120 different countries.

7. The third option is progression to the “Zones 3.0” – Special Economic Zones (SEZs) with an integrated solution that addresses global new trends in green growth as well as trade and investment policies with domestic institutional frameworks, industries and communities.

8. The 1st modern SEZ was established in Ireland in 1959. In China, national-level SEZs (incl. industrial parks) produce more than 30M jobs & about 22% of national GDP, 46% of FDI & 60% of exports.
Malaysia & Philippines present the scope of SEZs for a different economic stage.

9. In Pakistan, industrial estates have been established in all provinces. Eg: Value Addition City (Sheikhupura-Faisalabad Expressway), M3 Industrial City (Faisalabad), and Quaid-e-Azam Apparel Park (M-2 Lahore).

10. Over the years, there exist economic facilitation clusters incl. city-wide industrial clusters, industrial parks & SEZs.
Eg: Textiles cluster (Faisalabad), Sports & surgical clusters (Sialkot), Rachna Industrial Park (Lahore), Marble City & Textile City (Port Qasim).

11. With #CPEC entering its next phase, tax exemption for Gwadar’s economic zones are legally in place, agreements for two hydroelectric power plant projects (around $4B in cost) have been signed, & the Mainline-1 Railway Project has been approved at $6.8B.

12. At present, 9 CPEC SEZs have been set up including Rashakai Economic Zone (Nowshera) & Moqpondass SEZ (Gilgit-Baltistan).

CPEC can uplift the economy, infrastructure development & FDI, but it depends on how equipped Pakistan is strategically to take advantage of this.

13. This is Pakistan’s opportunity to move towards the league of fast-developing economies.
Imagine entering a garden-like township similar to Singapore’s Sino-Singapore Suzhou Industrial Park, known for its modern & safe living environment & sound industrial-urban integration.

14. In the past, Export Processing Zones & Industrial Estates have contributed to the economy through setting up of industry, job creation, & ⬆️ in exports. However, widespread criticism is that the development process has not been all encompassing or inclusive.

15. Pakistan’s growing IT sector is promising; employing around 150,000 people, it earned $1.4B by providing services in over 100 countries during 2019-2020, a YoY growth of 20.72%. Developing an IT SEZ has multiple advantages.

16. Advantages include the entrance of global tech companies, promotion of innovation & technology-based creativity,⬆️ in number of tech-companies based on the ease of operations, supply of high-skill workforce, & support for the local SME sector in terms of corporate innovation.

17. PM @ImranKhanPTI has shown keen interest in the development of Specialized Technology Zones for the IT sector, which displays political will and alignment with his vision of a better Pakistan.

18. On an institutional level, @PASHAORG has taken a lead to represent the IT sector for this matter and has put forth proposals for ease of business, affordable infrastructure and domestic demand through the 'Make in Pakistan' campaign.

19. In this nature-induced pause is a massive opportunity – reflect, focus, execute or we'd be pushed further back to a more challenging position.
To uplift itself from a historic economic dependence on the primary sector, & move towards high-value products Pakistan needs SEZs.