They mainly criticized the government´s current approach to pick up the sites for SEZ based on political interests, instead of selecting those through rigorous economic viability and feasibility. So, far the government has announced to develop SEZs in nine different places. [break]
“Rather than several projects, the government should focus on one project. The need of the hour is demonstration effect of a working pilot project,” said Gokhan Akinci, investment policy officer at the World Bank Group.
Sharing experiences of SEZ across the globe, he suggested the government to drop the idea of developing SEZ by itself and allow private sector develop it under public private partnership or on their own.
“Developing SEZ costs in a range of $50 million to $200 million; no government can afford it. Besides, SEZ developed and managed by private sector are more efficient and successful than those developed and managed by the public sector,” he said.
Economist Dr Pitambar Rawal, meanwhile, flayed the government for not pursuing proper feasibility study. He disclosed that the only SEZ that the government is about to complete was developed without taking feasibility study.
“This situation of starting project with political interest and without proper economic evaluation must be corrected, because unviable SEZ will impact the country negatively for a long-term,” he said.
In the same note, Irina Niederberger, investment climate program manager of International Financial Corporation (IFC), pushed the government to adopt SEZ regime that is attractive to broad base of investors.
Referring to a framework for SEZ regime that IFC recently proposed to the Ministry of Industry, she suggested the government to remove export requirement for any industry to shift to SEZ.
“The government should give equal opportunity to local companies to locate in the zone. It can exempt them from fiscal incentives, but allowing them to base in SEZ is important to ensure that SEZ is linked into national economy,” said Niederberger.
She also suggested the government to replace the current positive list approach for industries to be welcomed in SEZ with the negative list to ensure wider coverage of industries.
“The strategy of the government should be in developing appealing SEZ brand as a ´must see´ location and transform it into ´must invest´ location,” she added. She further urged the government to clarify institutional set up and begin inter-ministerial coordination immediately to ensure better logistics and service delivery to the investors.
She also asked the government to open SEZ development to the private sector under PPP model and pushed for national SEZ strategy, rigorous SEZ feasibility and site selection.
IFC has also urged the government to make the SEZ regime flexible and competitive. To attain that, it has suggested the Ministry of Industry to amend its present draft that has been tabled in the parliament so that good and meaningful SEZ regime could be created.
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