Islamic Republic of Pakistan Information Collection Survey for Forming a Sector Program for Improving Investment Environment Final Report
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Islamic Republic of Pakistan Islamic Republic of Pakistan Information Collection Survey for Forming A Sector Program for Improving Investment Environment Final Report December 2020 Japan International Cooperation Agency Asia Engineering Consultant Co., Ltd. KPMG AZSA LLC Koei Research & Consulting Inc. Table of Contents Table of Contents ...............................................................................................................................i Abbreviation ................................................................................................................................... iii 1. Background and Objective of the Survey ..................................................................................... 1 1.1. Background ............................................................................................................................ 1 1.2. Purpose and Survey Area ....................................................................................................... 1 2. Result of the Survey ...................................................................................................................... 3 2.1. Basic Information ................................................................................................................... 3 2.1.1. Federal Government ........................................................................................................ 3 2.1.2. Sindh ............................................................................................................................. 13 2.1.3. Punjab ........................................................................................................................... 14 2.1.4. Legal Framework and Administrative System and Organization ................................. 15 2.1.5. Policy ............................................................................................................................ 25 2.2. Status and Issues of the Investment Environment ................................................................ 31 2.2.1. Investment Promotion Agencies and Investor Services ................................................ 31 2.2.2. Incentives ...................................................................................................................... 33 2.2.3. Special Economic Zones and Export Processing Zones ............................................... 34 2.2.4. Tax System .................................................................................................................... 41 2.2.5. Finance and Foreign Exchange ..................................................................................... 45 2.2.6. Ease of Doing Business................................................................................................. 47 2.3. Industrial Human Resource Development and Employment ............................................... 50 2.3.1. Overview ....................................................................................................................... 50 2.3.2. Development of Industrial Human Resources .............................................................. 56 2.3.3. Employment .................................................................................................................. 79 2.3.4. Result of Discussion with and Hearing from Japanese Companies and Organizations 82 2.4. Infrastructure in Karachi (Logistics infrastructure) ............................................................. 87 2.4.1. Survey Scope and Target ............................................................................................... 87 2.4.2. Current Status of Pakistani Logistics Infrastructure ..................................................... 87 2.4.3. Results of Questionnaire to Japanese Companies ......................................................... 88 2.4.4. Public Administration for Logistics Infrastructure in Karachi ...................................... 90 2.4.5. Port Infrastructure in Karachi ....................................................................................... 93 2.4.6. Systemization of Port Management (EDI/NSW/PCS) .............................................. 101 2.4.7. Land Transportation Infrastructure in Karachi ............................................................ 103 2.4.8. Environmental and Social Considerations in Pakistan and Sindh ............................... 108 2.4.9. Analysis on Port-related Projects in Karachi .............................................................. 110 2.4.10. Analysis on Land Transportation Projects in Karachi ............................................... 115 i 2.4.11. Short List of Logistics Improvement Projects in Karachi ......................................... 123 2.4.12. Possible JICA Support for Logistics Improvement in Karachi ................................. 135 2.5. The Trends of Assistance by Other Development Partners ................................................ 168 2.5.1. Support by Multilateral Institutions for Investment Policy ......................................... 168 2.5.2. WB Assisted Projects in Karachi ................................................................................ 196 2.5.3. Support from Bilateral Development Partners Related to Investment Policy ............. 205 2.5.4. Assistance from Other Bilateral Development Partners .............................................. 208 2.5.5. Support by the Multilateral Institutions/Bilateral Development Partners for Industrial Human Resource Development ................................................................................................ 211 2.5.6. Interrelationship among the Development Partners on Investment Policy ................. 215 2.5.7. Policy Areas Not Supported by Development Partners .............................................. 216 3. Summary of Survey and Issues and Discussion on Possible Areas for JICA’s Support............ 222 3.1. Policy Matrix ..................................................................................................................... 222 3.2. Consideration of Each Issues ............................................................................................. 230 3.2.1. Investment & Business Environment .......................................................................... 230 3.2.2. Industrial Human Resource Development and Employment ...................................... 244 3.2.3. Infrastructural Development ....................................................................................... 251 3.3. Issues Japanese Companies Face ....................................................................................... 252 ii Abbreviation Abbreviation Official Name ADB Asian Development Bank ADP Automotive Development Policy AFD Agence Française de Developpement AVTI Atlas Vocational Training Institute BBSYDP Benazir Bhutto Shaheed Youth Development Program BISP Benazir Income Support Program BMS Bundesministerium fur wirtschaftliche Zusammenarbeit und Entwicklung BOA Board of Approval BOI Board of Investment CBT-A Competency Based Training and Assessment CLICK Competitive and Livable City of Karachi COE Center of Excellence COVID-19 Coronavirus Disease 2019 CPEC China-Pakistan Economic Corridor DAE Diploma of Associate Engineer DFID Department for International Development DLIs Disbursement-Linked Indicators EC European Commission ECNEC Executive Committee of the National Economic Council EDB Engineering Development Board EDF Export Development Fund EFF Extended Fund Facility EIA Environmental Impact Assessment EODB Ease of Doing Business EPZ Export Processing Zone EPZA Export Processing Zone Authority EU European Union EXIMBP EXIM Bank of Pakistan FBR Federal Board of Revenue FDI Foreign Direct Investment FIEDMC Faisalabad Industrial Estate Development & Management Company FPCCI The Federation of Pakistan Chambers of Commerce & Industry GCT Government College of Technology iii GDP Gross Domestic Product GIZ Deutshe Geselleschaft fuur Internationale Zusammenarbeit ICISDD Industries, Commerce, Investment, and Skills Development Department IEE Initial Environmental Examination IFC International Finance Corporation IMF International Monetary Fund IPA Investment Promotion Agency JETRO Japan External Trade Organization JICA Japan International Cooperation Agency KfW Kreditanstalt für Wiederaufbau KNIP Karachi Neighborhood Improvement Project KPT Karachi Port Trust KTDMC Karachi Tools, Dies & Moulds Centre MOC Ministry of Communications MOCT Ministry of Commerce and Textile MOIP Ministry of Industry and Production MOMA Ministry of Maritime Affairs MOR Ministry of Railways MQM Muttahida Qaumi Movement NAC National Accreditation Council NAVTEC National Vocational Technical Education Commission NAVTTC National Vocational & Technical Training Commission NCC National Competitive Council NHA National Highway Authority NIP National Industrial Parks Development and Management Company NSS National Skills Strategy NSW National Single Window NTP NTP NVQF National Vocational Qualification Framework OSS One Stop Shop OWF One Window Facility PAAPAM Pakistan Association of Automotive Parts & Accessories Manufacturers PBIT Punjab Board of Investment and Trade PCS Port Communication System PCSIR Pakistan Council of Scientific & Industrial Research iv PE Permanent Establishment PGG Pakistan Goes Global PHMA Pakistan Hosiery Manufacturers & Exporters Association PID Project Information Document PIDC Pakistan Industrial