ISLAMABAD, April 14: The Competitiveness Support Fund (CSF) has identified several gaps and shortcomings that are preventing firms and organisations from fostering competitiveness in Pakistan.
The CSF, a joint initiative of the ministry of finance and the United States Agency for International Development (USAID) in its annual report, also made available to Dawn on Saturday, called upon the government to remove various hurdles with a view to enhance the country's competitiveness in the world. The report will be officially launched on Monday.
It said that there existed a weakness in the legal framework, which needed to be removed for ensuring a viable economic environment. The benchmarking exercise of the CSF identified gaps, which also included the slow commercialisation of innovative approaches, lack of linkages between the academic community and industry and poor dialogue on policy and reform issues.
The theme of the report — Linking Finance to Innovation and Competitiveness — proposed several interventions that could accelerate the adoption of practical competitiveness building initiatives in Pakistan.
It believes that Pakistan lacks a vehicle as a competitiveness support fund to finance and promote innovation and competitiveness. However, CSF assured to help address various gaps to make Pakistan a more competitive economy by providing input policy decisions, working to improve regulatory and administrative frameworks and enhancing public-private partnership within the country.
The Fund has agreed to provide $12 million over a three-year period while the government of Pakistan will match USAID's contribution up to $10 million for promoting the competitiveness of the Pakistani businesses.
It said that financial support, technical assistance and co-financing for initiatives related to entrepreneurship, business incubators and private sector led initiatives with research institutes and universities that contribute to creating a knowledge driven economy, will be offered by the USAID.
Pakistan was told that USAID, through CSF planned to provide more financial assistance in the shape of a grant to those sectors of Pakistani businesses that have a potential to become competitive at domestic and international markets to yield sustained growth and poverty reduction.
In this regard, eligible applicants include industry associations and other bodies that represent the collective interest of a number of firms in an industry sector, universities and industry related research institutes.A monitoring and evaluation system will be jointly developed and implemented by the Sindh government and the CSF to ensure successful and timely completion of selected projects.
In this context, a Sindh Roundtable on Competitiveness (SRC) will be set up and a platform to promote public-private and academia partnerships on competitiveness and help effective implementation for selected programmes and projects in the province."Based on SRC and deliberations of both the parties to this MOU, a detailed action plan will be developed for the proposed joint initiative with their budget estimates," the report said.
The principle subject areas in the CSF - government of Sindh (GOS) Action Plan included the support to the Karachi Fish Harbour (KFH) to further help overcome technical problems that reduce the competitiveness of the entire national fishery.
"Exports are under threat due to poor hygiene and management," the report said adding that the ministry of finance and the State Bank will focus on key indicators of the macroeconomic issues such as inflation, budget deficits, debt as percentage of GDP, the national savings rate and the average "spread" between the average loan rate and deposit rate in Pakistan's banking sector.
Similarly, the Securities and Exchange Commission of Pakistan (SECP) and related organisations have a key role to play in addressing Pakistan's relatively low scores related to corporate governance, protection of minority shareholders' right, efficacy of corporate boards and accountability. "Addressing these will help improve the overall image of private sector institutions."
Likewise, the ministry of finance could play its due role by boosting Pakistan's exports, which rank low among countries in terms of exports as percentage of GDP.
Talking about the role of the ministry of privatisation and investment, it said that while protecting the rights of existing workers, it needed to continue to be attractive to possibilities of improving efficiency by passing non-strategic state-owned enterprises to the private sector.
The recent successful results in the financial sector are in a large part thanks to previous privatisation efforts. This will improve the scores of Pakistan in terms in a variety of efforts related to the business sophistication and market efficiency indicators.
