Procedural bottlenecks impede entrepreneurship growth

LAHORE: Small entrepreneurs are unable to participate in the mainstream economic system as institutional structures are ill-designed and decision making is undemocratic, increasing cost of doing business.
The government should take notice of this flaw and remove impediments that prevent participation in national and local decision-making, which subsequently foster unresponsive policies.
The obstacles politically and economically disenfranchise citizens, jeopardise the consolidation of political and economic reform and threaten exclusion from global markets.
In early stage of business cycle, they lack resources to comply with burdensome and excessive rules and regulations necessary to become part of the formal economy.
They remain excluded from mainstream economy as they cannot participate in tenders.
Exclusion from participation forces numerous entrepreneurs to engage in low income and low-growth informal business activities.
Taxation system should be simplified and even a street vendor must be facilitated to contribute something in national exchequer.
In Singapore, street vendors pay taxes because there is flexibility in labour laws.
Entrepreneurs are unable to tap latent potential in informal sector despite that they manufacture electric fans, room coolers and plastic products without formal permits from the state or registration with the industries, labour and environmental departments.
There is a need for a change in governance and social systems in the country.
The state should make registration of businesses easy.
For small traders and manufacturers, a state institution must be assigned the task to register them at their doorstep and facilitate them in becoming part of formal economy.
Pakistan desperately needs a well-designed, transparent, stable set of political and economic institutions that foster democracy and market-based economic activity and provide level-playing field for all citizens.
The level of public participation and transparency in the policy making and legislative process has to be increased by instituting transparent and inclusive decision-making procedures.
Public must be provided opportunity to comment on existing and proposed laws and regulations. Television and radio channels should be assigned the task of creating awareness on all rules and regulations regarding fair business practices and the ways to resolve any issue that may arise while fulfilling the formalities.
Exclusion from participation occurs if the legal and regulatory codes are not clearly streamlined and there are duplicative and superfluous laws.
Such procedures provide an opportunity for corruption, resulting in increase in cost of doing business.
Every citizen has the right to have access to private property rights, which should clearly be defined and strongly enforced.
Entrepreneurs with modest means would become formal if the requirements to obtain business permits and licences are simplified and made inexpensive.