Experts urge steps to tap potential of services sector

LAHORE:The services sector has a critical importance for any vibrant economy. However, several steps are required to tap the real potential of the sector especially in Punjab.

This was stated by experts on economy and investment while sharing their views with the participants in an online consultative dialogue “Better Business Regulation for Services Sector in Punjab” organised by the Sustainable Development Policy Institute (SDPI) here on Thursday.

Director (Policy) at Punjab Board of Investment and Trade Sohail Qadir, citing the examples of the Chinese enterprises relocating due to higher labour costs, said the enterprises are opting for Mekong countries that are known for quick harmonising their regulatory regime with China. IT parks can help promote IT-enabled businesses which are much desired by Chinese, he said and added there was a need to help the new graduates understand the needs of Chinese services sector and how to integrate in Chinese value chains.

Group Head at Bank of Punjab Khawar Ansari informed the participants that banking services are being innovated to respond to the COVID-19-related needs of businesses. “We would like to see that businesses applying for loan have secured their future cash flows,” Ansari said and added, “We need to be more receptive to venture and angel investors.”

SDPI Joint Executive Director Dr Vaqar Ahmed moderating the dialogue shared the findings of the SDPI’s survey with the participants and said that services sector in Punjab is finding it hard to grow due to difficult access to business premises, fragmented tax regime demanding compliance with over three dozen taxes and difficulties in access to running finance and fixed investment sources particularly in COVID-19 times. He said that some other challenges affecting sustainability of services sector firms include weak access to public procurement opportunities, inadequacy of e-commerce, online and digital payments infrastructure as well as weak linkages with regional and global value chains; and arbitrary imposition of labour, municipal, and environmental laws. He hoped that the government will soon initiate a trade-in-services agreement with China which can bring down costs for the Pakistani firms wishing to integrate with Chinese services sector.

Director (Innovation) at Lahore Garrison University Imran Jattala was of view that the knowledge of building services businesses and scaling it up is limited to select family groups in Pakistan.

Senior Research Fellow at Punjab Economic Research Institute (PERI) Dr Shehzada Naeem asserted that the provincial government is trying to improve engagement with business associations to better understand the needs of the private sector in the wake of COVID-19. To boost productivity in the services sector, he emphasised on the importance of improving Pakistan’s ranking in ICT adoption and logistics indicators which are closely watched by foreign investors.

Ms Mahnoor Arshad, researcher on issues faced by women-led enterprises, was of the view that women-led enterprises have been the hardest hit during COVID-19. Earlier, Ahad Nazir, head of SDPI Centre for Private Sector Engagement, shared his insights on the impacts of COVID-19 on the businesses, including the services Sector and said that the federal government should streamline regulatory environment whereas e-commerce and cluster based services sector development should be promoted in Punjab.