In a recent meeting with Special Assistant to the Prime Minister for Industries and Production, Haroon Akhtar Khan, renowned Belgian-British economist Professor Stefan Dercon stressed the urgent need for Pakistan to adopt a balanced and consistent industrial policy that encourages productivity while offering reasonable protection to domestic industries.
The high-level discussion, held on Tuesday, covered a range of pressing economic issues, including macroeconomic stability, foreign reserves, exports, imports, and the critical role of industrial policy in driving sustainable growth.
Haroon Akhtar Khan highlighted two structural gaps hampering industrial development in Pakistan — the absence of a formal bankruptcy law and a clearly defined industrial policy. He argued that these are essential for enabling sustainable and inclusive growth in the manufacturing and production sectors.
“The current high tax rates and electricity tariffs have historically stifled industrial productivity,” Khan noted. He reaffirmed the government’s commitment to reviving sick industries and enabling them to operate at full capacity, a move expected to contribute significantly to the country’s economic revival.
Professor Dercon echoed the need for a long-term and predictable policy environment to make Pakistani industries competitive in the regional and global markets. “An effective industrial policy should strike a balance between providing protection and offering incentives to boost productivity,” he said.
He emphasized that special incentives must be targeted towards sectors that demonstrate high productivity potential, thereby ensuring better returns on policy interventions and fostering innovation-driven industrial growth.
The economist also pointed out the detrimental impact of customs tariffs on local manufacturing and exports, calling for comprehensive reforms to create a more export-oriented economy.
Concluding the meeting, Haroon Akhtar Khan stressed that greater investment in the industrial sector is vital for sustainable economic growth. He reiterated that improving the business climate through reforms and policy consistency would pave the way for long-term industrial expansion.
