Uncovering the Barriers to Investment in Pakistan

Islamabad, Pakistan

The major problems with an economy aren't always what they seem. A common belief in Pakistan was once that the country's written statutes and regulations weren't the problem, but the government agencies implementing those laws.

However, when Locus CEO Jean-Paul Gauthier led the World Bank's "Pakistan Administrative Barriers to Investment Study" from 2003-2007, he demonstrated that this wasn't the complete story. The study revealed that 79% of investors stated that regulations on acquiring and developing land were the major obstacle to investment in Pakistan. 49% identified these regulatory barriers as "severe." Other major barriers identified were financial regulation (57%), tax administration (53%), business registration (38%) and labor regulation (30%).

The study further demonstrated that the reforms being proposed at the time were not sufficient to address these problems. 

The regulatory barriers to land acquisition and development in Pakistan have contributed to a scarcity of serviced, developed land for industries that persists to this day. Locus Economica was later contracted to return to Pakistan to help address this problem by advising on their special economic zones and industrial estate programs in 2015, which are designed to increase the supply of industrial land.

Jean-Paul's work on the Pakistan Administrative Barriers to Investment Study was conducted as a team leader for the Foreign Investment Advisory Service (FIAS) and the U.S. Trade and Development Agency.