Policy Advocacy & Economic Reforms

An important element of CIPE’s work in Pakistan is to encourage policy advocacy on key business issues in order to promote more democratic interactions between the business community and government. CIPE’s business policy reform series identifies salient economic policy issues affecting local businesses and engages the business community in discussing the issues through public forums. In 2007, CIPE focused on issues such as strengthening Pakistan’s microfinance sector and building venture capital and private equity to encourage economic growth.

Trade Organizations Ordinance
In the case of Pakistan, both the business community and key government officials recognize that the 1961 Trade Organization Public Law (Ordinance No. XLV of 1961), as amended in 1997 (NO.5(2/97-TO-I)) and including all regulations promulgated with it, is not complementary to the modern business environment and does not reflect the true voice of trade bodies in the country.

As such, CIPE initiated a dialogue with FPCCI and the Ministry of Commerce in late 2005 to work together in bringing the 1961 DTO in line with today’s business world. Throughout the project, CIPE Pakistan met several times with the Minister of Commerce and other relevant officials, and gained support from the minister for this initiative.

In early April 2006, the Ministry of Commerce created a six-member committee under the chairmanship of Chief Justice Saleem Akhtar to review the existing law and, through a consultative process, to recommend changes to bring the current law in the line with international best practices. CIPE Pakistan was asked to fill one of the positions on the committee and has played a key role to date, including its role in preparing the terms of reference under which the committee functions.

The draft law was presented to the Minister of Commerce on November 15. The law enhances freedom of association and creates new self-governance mechanisms. It also provides for depolarization of the trade bodies through a transparent election process and the appointment and development of professional management within all trade bodies in Pakistan. The new Trade Organizations Ordinance 2006 was promulgated on 31st December 2006. Under the new law, the ministry is in process to license 152 chambers and associations as well as at least five women chambers in the country. Click here

Microfinance
CIPE organized focus group meetings in Karachi and Islamabad to develop a consensus on policy issues among microfinance companies. Participants in the meetings included senior representatives from microfinance institutions, representatives from the State Bank of Pakistan and the Securities and Exchange Commission of Pakistan, the chairman of the Leasing Association, and the chairman of the Modaraba Association, as well as representatives from the International Finance Corporation (IFC) and the European Union (EU). Through interactive sessions, the participants identified legislative and operational issues that have hindered the development of microfinance lending. Participants also concluded that the successful development of the microfinance sector will require government implementation of enabling policies developed through a consultative process with stakeholders.

Following the two focus group meetings, CIPE held a roundtable discussion on ‘Microfinance Outreach and Enterprise Financing’, led by State Bank of Pakistan (SBP) Governor Dr. Shamshad Akhtar. The event, held on August 1, was attended by 75 representatives of the banking and financial industry, business, and international organizations. Recommendations produced by the roundtable participants were posted on CIPE’s website for comments and SBP agreed to move all finalized recommendations through a review process and develop an appropriate implementation plan. Following receipt of the recommendations, SBP organized a consultative group and included CIPE as a member. Click here

Venture Capital and Private Equity
CIPE together with The Indus Enterprise (TiE) organized a Business Policy Roundtable to discuss the draft regulations for Venture Capital and Private Equity Sector. TiE invited Mr. Christopher Lane Davis of McCarter English Attorneys of USA to share his expert views on international best practices. The roundtable was led by Mr. Salman Sheikh, Commissioner, Securities and Exchange Commission of Pakistan, whereas 54 stakeholders representing various sectors participated in the policy debate. On CIPE's recommendation, it was agreed that the stakeholders will form an association which will also act as a think tank and assist the Securities and Exchange Commission of Pakistan on resolving issues related to this sector. The draft recommendations from the roundtable have been circulated among the participants and are being placed on CIPE's for comments. Click here

Youth Policy
What should be included in Pakistan’s National Youth Policy? And who should have input into how the policy is written? The answer to the second question is easy – young people themselves should have the opportunity to make recommendations for incorporation into such a policy before it is passed.
CIPE, the Islamabad Chamber of Commerce and Industry (ICCI), and the Ministry of Youth Affairs held a conference in Islamabad on the draft policy – the first-ever opportunity for youth in Pakistan to provide feedback directly to policymakers.
To attend the conference, participants traveled to Islamabad from all areas of Pakistan, including Lahore, Mardan, Multan, and Peshawar, just one day after a fatal bombing in the federal capital. In total, over 130 students, young entrepreneurs, and decision-makers attended, which is 60 more than originally anticipated.
During breakout sessions, participants developed recommendations for the National Youth Policy in the fields of entrepreneurship, skills development, micro-finance, and internship programs, which were provided to the Ministry. Among the many practical suggestions, participants recommended:

•  Establishing a lower loan interest rate for young entrepreneurs with sustainable business plans;
•  Instituting a uniform application process for the Government’s internship program to give equal opportunity to all students;
•  Creating career centers and incubation centers in universities, and holding job fairs; and
•  Cultivating partnerships between universities, chambers of commerce, and businesses to guide students in entrepreneurial activities and job placement.

The Youth Conference was attended by Secretary for Youth Affairs Mr. Ashfaq Mahmood, who demonstrated his strong commitment to engaging youth in the reform process. He took notes throughout the young people’s presentations of their policy recommendations and provided feedback on the spot. At the conclusion of the event, he observed, “This is the beginning of the dialogue,” and stated, “[the Ministry of Youth Affairs is] responsible for delivering the promises set forth in the [National Youth] Policy.” He also requested further input from the participants on the issue of developing the entrepreneurial capacities of rural youth, which is a pressing issue in Pakistan due to a high unemployment rate and a large youth population.
Speakers at the conference included Mr. Muhammad Ijaz Abbasi , president of ICCI, Mr. Moin Fudda, country director of CIPE Pakistan, and representatives from USAID and the Acumen Fund. Mr. Fudda emphasized the importance of creating an enabling business environment for youth, noting, “Bringing young entrepreneurs into mainstream economic activities will strengthen the entrepreneurial culture in [Pakistan].”

At the conclusion of the event, participants and policymakers agreed that creating a good policy is just the first step in developing the entrepreneurial capacity of youth in Pakistan..

Trade Ordinance 2007 Re-promulgated on June 5, 2007 by Ministry of Law,  Justice & Human Rights. No. 2(1)/2007-Pub. The following Ordinance promulgated by the President is hereby published for general information. ORDINANCE NO. XXXI OF 2007, AN ORDINANCE to provide for the registration and regulation of trade organizations. Read law in PDF
Trade Ordinance Rules 2007 GOVERNMENT OF PAKISTAN, MINISTRY OF COMMERCE Islamabad, the 07th June, 2007 NOTIFICATION S.R.O…… (I)/2007 – In exercise of the powers conferred by section 31 of the Trade Organizations Ordinance, 2007 (XXXI of 2007), and in suppression of the Trade Organizations Rules, 2007, notified vide Notification No. S.R.O. 260(I)/2007, dated the 15th March, 2007, the Federal Government is pleased to make the following rules, namely. THE TRADE ORGANISATIONS RULES, 2007. Read rules in PDF
Business Policy Roundtable on “Improving Outreach and Possible Solutions to Enterprise Financing” CIPE, in support with State Bank of Pakistan organized a business policy roundtable on issues relating to microfinance outreach and possible solutions for improvement in micro-enterprise financing. The roundtable was attended by a wide cross section of financial sector and resulted in some of the significant recommendations later adapted by the microfinance sector. To view the concept paper of this roundtable, please click here
Business Policy Roundtable on SECP’s Draft Regulations on Venture Capital & Private Equity CIPE together with The Indus Entrepreneurs (TiE) organized a business policy roundtable to discuss the key issues in the regulatory framework for Venture Capital/ Private Equity. The roundtable was widely attended by existing and potential players of venture capital industry who overwhelmingly participated with recommendations, most of which were later adapted by SECP is its regulations. To read the concept paper of this roundtable, please click here
Youth Policy   CIPE, in support with the Islamabad Chamber of Commerce and Industry (ICCI), and the Ministry of Youth Affairs,  held a conference in Islamabad on the draft policy – the first-ever opportunity for youth in Pakistan to provide feedback directly to policymakers. please click here
Business Policy Roundtable on “Social Enterprise – Beyond Philanthropy” CIPE in collaboration with Responsible Business Initiative (RBI) organized a business policy roundtable on the ideas of corporate citizenship and how companies can be more creative and innovative in implementing these ideas through strategic planning. The roundtable was attended by representatives from local and multinational organizations, businesses, chambers of commerce, business associations, the media and non-governmental organizations. please click here

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