press releases

September 16, 2005

Government Introduces Industrial Policy Reforms

Karachi - The Government of Pakistan is providing important trade and other incentives to three major industrial sectors: Diary, Marble and Granite, and Gems and Jewelry. These incentives and trade policy reforms are based on recommendations generated by a USAID-funded project—Pakistan Initiative for Strategic Development and Competitiveness.

Under the project, targeted industries are organized into "Strategic Working Groups" or "SWOGs." Together with industry leaders, Government of Pakistan officials, academia and relevant NGOs, members of the SWOGs work as a team to develop strategies for upgrading production and improving the international competitiveness of Pakistani products.

This highly effective public-private partnership has led to significant policy reforms. In the dairy industry, import duties on packaging materials for dairy and food products have been reduced considerably. The duties on folding cartons and aluminum foil have been reduced from 25%, to 15% and 10%, respectively.

To help increase milk collection and improve milk quality in rural areas of Pakistan, the GOP has abolished duties on milk chillers of less then 3,000 liters capacity. Similarly, the GOP has reduced the customs duties to 5% and completely eliminated the sales tax on imported machinery and equipment used for mine development and mineral extraction.

The project seeks to strengthen the cooperation among proactive, small and medium sized enterprises through their participation in the SWOGs, thereby increasing the competitiveness of Pakistan’s industrial base. Through the SWOGs, industry leaders identify priority investments needed in the areas of human resource development, infrastructure, technology and management. These investments will contribute to the production of higher quality products, which in-turn will improve the competitiveness of Pakistani industries in local and international markets. The project also permits the expansion of small and medium business, thereby generating badly needed employment in these sectors.

Addressing the joint press conference with SMEDA, the Minister of State – Chairman of the Export Promotion Board Tariq Ikram announced the trade policy reforms that the Government of Pakistan has adopted and incorporated in the GOP’s 2005-06 budget. U.S. Ambassador Crocker commended the Government of Pakistan’s efforts and willingness to engage in such effective public-private dialogue. The U.S. Ambassador pledged continued U.S. assistance to build on and expand these highly successful public-private partnerships as an essential component of its overall $1.5 billion assistance package to Pakistan.

Source: http://islamabad.usembassy.gov/pakistan/h05091601.html