Investment Policy Framework for Punjab
Scope of Work Summary:
With an increased focus of Government on boosting investments within Pakistan, specifically in light of the ongoing China Pakistan Economic Corridor initiative, it is not only important but also necessary for provinces to identify key impediments that are impeding foreign and local investment and take measures to address those hurdles. Addressing such hurdles may include putting in place a sound & structured mechanism in the form of an investment policy framework, creating a conducive business environment for attracting private investments and providing targeted investment incentives in order to promote economic growth. The assignment will focus on identifying the key impediments to investments and providing recommendations on the relevant provincial policy areas that impact investment and support generation of investments
1. Position Titles & Department:
Short Term Technical Experts, Business Enabling Environment Component. The proposed team composition for this assignment will include the following;
- Institutional Expert
- Economist
- Legal Expert
- Research Associate
- Investments Expert
The team will be led by the Institutional Expert and the outcome of this assignment, in the form of final deliverable report, will be a collective work of the team.
2. General Summary:
Creating an enabling business environment is one of the core work streams of this project. As such, the Project engaged with the Government of Punjab to identify key areas of collaboration. Consequently, the Planning & Development Department, through the Investment Climate Reform (ICRU) in designing an incentivized Investment Policy, targeting both FDIs and local investments and developing a framework for its implementation.
Investment is central to economic growth, driving job creation and boosting an economy’s productive capacity and income growth. International investment in particular is also useful as a source of technology transfer. Yet, net inflows of FDI in Pakistan have declined steadily over the last ten years. Measured as a percentage of GDP, FDI is now well below the average for both South Asia and for lower-middle income countries.
The investment expected under the ongoing China Pakistan Economic Corridor initiative should contribute towards reversing that trend. However, it will be important to have in place a good investment policy framework to ensure that investments that promote economic growth, technology transfer and domestic employment are encouraged, but that negative spillovers such as environmental degradation are kept at bay.
This requires building a competitive environment for investment, an enabling regulatory structure, and an attractive set of incentives. This can be done through several integrated policy arms including investment policy, investment promotion and facilitation, trade policy, competition policy, tax policy, public governance and financing for investment. The assignment will focus on providing advice on the policy arms and levers that are in the domain of the Government of Punjab. Additionally, the focus of the assignment is on facilitating investment in the SME sector especially by mobilizing domestic investors.
The recommendations will support and be informed by Punjab’s objectives and priorities, as specified in the Punjab Growth Strategy 2018. The analysis based on Punjab’s strengths and constraints should be complementary to federal investment policy.
3. Objective of the Consultancy:
Objective: To mobilize investments especially from private sector in Punjab, particularly in the SME sector through policy reforms
The purpose of this assignment is to provide advice for an investment policy framework for Punjab that encourages investment and assists in meeting the objectives of private sector development and growth set in the Punjab Growth Strategy.
The assignment will focus on evaluating and providing recommendations on the relevant provincial policy areas that impact investment, namely investment policy, investment promotion and facilitation and business environment.
4. Principal Duties & Responsibilities:
• To identify key bottlenecks and impediments to foreign and local investment in Punjab, including structural and institutional forces that block or facilitate or enable reforms in the investment climate sphere. Along with identifying issues pertaining to investments, impediments that SMEs face who are willing to "export" will also be studied.
• Organize and hold meetings with key public and private sector players regarding investment promotion opportunities, issues & challenges, specifically focusing on SMEs.
• With mutual collaboration of the project and the Investment Climate Reform Unit (ICRU), plan and conduct issues specific focus group discussions and/or public private dialogue.
• To review and assess the national investment policy and the investment policies in Punjab and identify existing gaps, as well as contradiction, if any with a special focus on SMEs. This would also include conducting a holistic review of any work already done on the subject by the Provincial Government and calibrating the findings accordingly, to avoid any possible duplication.
• To analyze and identify improvements through investment policy revisions wherever necessary and areas of legislative, regulatory and/or institutional reform required for a more efficient mechanism of policy implementation
• To propose measures of promoting investments including incentives structure, if any.
• To collaborate with and build on the work of other projects engaged in promoting investments in the province.
5. Specific Tasks of the Consultants:
The specific purpose of this assignment is to identify key impediments to investments in Punjab and undertake assessment of the existing investment policy framework and provide recommendations. . The consultants will also benchmark the existing investment policies with those of major competitor economies by sector and/or region and provide best practice guidelines for sustainable investment policy formulation.
Specific tasks required are:
Task 1 - Literature review and secondary research
1.1 The consultants will review the ongoing or previous work on investment policy and incentives in Punjab and will also review other available literature on investment impediments in the province.
1.2 The consultants will identify recent investments or pipeline investments in Punjab. Ideally, this should include foreign investment, local investment and investment undertaken by
SMEs in particular.
1.3 The consultants will also develop a better understanding of government institutional space by identifying key actors working within this domain.
1.4 The consultants will also undertake a review of best practice on investment policy, particularly investment incentives
1.5 The consultants will review the capacity of government institutions to structure investment deals and past experiences in innovative financing
1.6 The consultants will review the provincial policies including agricultural, ICT and industrial policies, etc.
1.7 The Consultants will review international best practices in environment friendly investment promotion.
Task 2 - Scanning investment landscape of Punjab
2.1 The consultants will engage with selected investors (foreign and local; large and small), who either have invested in Punjab or are in the process of considering investment and identify impediments that they have faced or are facing in the process. These issues may include conditions of FDI entry and establishment, provincial taxation and investment incentives, laws relating to business (general and specific), competition, employment and the environment, access to land and/or dispute settlement or contract enforcement.
2.2 The Consultants will support ICRU to establish a working group of various investors to further help identify impediments and provide viable solutions to overcome these impediments on an ongoing basis.
2.3 The consultants will hold 2 FGDs with SMEs & investors in selected sectors to validate the list and expand the findings. The proposed location of these FGDs is Lahore & Multan or Bahawalpur. Given that there is a huge concentration of SMEs in Punjab; spread out from the Provincial capital to the southern part of the Province (including Multan & Bahawalpur), the selected cities is an appropriate mix which will enable us to get a firsthand flavor of the situation and these are the cities which are likely to create the right investment opportunities.
2.4 The consultants will narrow down the findings to 7-8 key issues hampering investment in Punjab.
Task 3 – Institutional, policy and regulatory analysis around key impediments
3.1 This task will be informed through earlier tasks and will revolve around the shortlisted investment impediments. The consultants will categorize the impediments based on whether they are federal or provincial or if the bottlenecks are stemming from institutional, policy or regulatory issues.
3.2 The consultants will deepen the analysis around these impediments, especially the ones that are provincial. The consultants will hold one-on-one meetings with key government agencies.
3.3 The consultants will review of the relevant laws and regulations and will identify areas for improvement and reform.
Task 4 – Recommendations and final report formulation
The consultants will jointly produce a final report, with four distinct parts:
4.1 Targeted investment incentive policy – The consultants will produce an investment incentive policy for Punjab, with targeted incentives that can help attract potential investors, along with proposed good practices on such investments
4.2 Provincial policy, regulatory and institutional reform package for investment promotion – The consultants will propose a provincial reform package. This package will include early win reform proposals that can be addressed at the provincial level and will include specific institutional, policy or regulatory measures pertaining to various provincial agencies or subjects.
4.3 Communication & advocacy pack for federal policy, institutional and regulatory levers – From the identified list of impediments, the consultants will develop short policy briefs for each of the federal-level issue/impediment. These policy briefs will be used by the provincial government to reach out to federal government for advocacy around these issues.
4.4 Investment climate reform agenda for ICRU – From the list of identified challenges, it can be expected that some would be more deep-rooted challenges that would need further diagnostics and follow-on work. This section will identify those areas and will provide the BEE reform agenda for ICRU to address investment impediments.
4.5 Stakeholder session of deliberation with ICRU and other concerned agencies to build credibility and ownership prior to the Regulatory Review into the Deliverables. These stakeholders may include relevant nominations from the Public-Private-Dialogue Wing and the Ease of Doing Business Wing.
4.6 Create a list of potential investors, investment facilitators and a broad outline of communications strategy for attracting investments. Propose a capacity building plan and share some standard language for different kinds of investment agreements.
4.7 Ensure that different policies promoting investments in specific sectors (agriculture, industries and services) are synergized in to the document.
6. Job Qualifications:
|
Advisor Person Specifications Level of Effort
|
|
Institutional Expert
|
• Masters degree in Public Policy, Law, Public Administration from a university of repute
|
35 days
|
|
• At least 10 years of experience working in development issues
• Deep knowledge and understanding of the national, provincial, local regulatory, legal and policy environment pertaining to the SMEs
• A sound understanding of issues related to the role investment plays in the economy, particularly is a developing country context
• Knowledge of investment policies in Pakistan and Punjab, as well as best practice
• Previous experience of working with USAID projects in the area of economic growth will be preferred
• Experience of working with donor projects in the
SME space
• Excellent communication and report writing skills
|
|
Economist • Masters degree in Business, Economics, 35 days
Management, Public Policy from a university of repute
• At least 5 years of experience in undertaking research on industrial development in Pakistan
• Good understanding of the current business environment, macro-economic framework and the corresponding institutional arrangements at the federal and provincial levels
• Deep understanding of the investment climate in Pakistan and Punjab and of the investment policies and incentives
• Good understanding of the constraints faced by the
SMEs at the federal and provincial levels
• Previous experience of working with USAID projects in the area of economic growth will be preferred
• Experience of working with donor projects in the
SME space
• Excellent communication and report writing skills
|
|
Legal expert • Masters degree in law 20 days
• At least 5 years of relevant experience
• Solid understanding of laws relating to business (general and specific), competition, employment and the environment, access to land, and dispute settlement
• Good understanding of the current business environment, macro-economic framework and the corresponding regulatory and legal arrangements at the federal and provincial levels
• Excellent communication and report writing skills
|
|
Investments Expert
|
• Masters degree in Development Economics, Public Policy, Public Administration from a university of repute
• At least 5 years of experience in investment/business advisory, banking and/or asset management
• Deep knowledge and understanding of the national, provincial, and local impediments to investment; identifying the challenges and opportunities, particularly in the context of SME sector
• Prior experience in developing financial mechanisms/tools to accelerate investments in an
underdeveloped sector
|
25 days
|
|
• Extensive knowledge of business investments environment and ability to trigger match-making between private sector and investors in development projects.
• Prior knowledge and experience of undertaking economic and investment studies and designing investment strategies for the Government
• Knowledge of investment policies in Pakistan and
Punjab, as well as international best practice
• Previous experience of working with USAID projects in the area of economic growth will be preferred
• Experience of working with donor projects in the SME
Space
|
|
Research Associate
|
• Masters degree in Economics, Business or related, from a university of repute
• Prior experience of research, especially in handling data
• Confident in the use of data packages such as stata, excel, SPSS
• Good writing and editing skills
|
25 days
|
| |
|
|
|
|
7. Duty Station:
The consultants will be based in Lahore and will be working closely with the project team.
8. Workspace and Use of Personal Laptop and Software(s):
The consultants are required to use their own personal laptops for this assignment.
9. Reporting:
The work of the consultants will be supervised by the Senior Policy Advisor along with the project BEE team. The consultants will be required to report to the Senior Policy Advisor and/or his designee.
10. Duration of the Assignment:
This job is planned to take place as per a start date of on or around 01/10/18 and end date of on or around 06/10/18 (subject to date of mobilization) hereto for a total of 35 person days level of effort (LOE) (each for institutional expert and economist), 20 days LOE (for legal expert), 25 days (for Investments Expert)and 25 days (for Research Associate), including 5 travel days each. The LOE will be spread over five months. The last date for submission of final deliverable(s) is 06/15/18.
11. Deliverables:
The following are the key deliverables and their associated deadlines. The final deliverable for this assignment is the Final Report. The timeline for the LOE assigned for each activity as mentioned in the following table will be discussed and agreed with the technical team and the consultant.
|
No.
|
Activity
|
Timeline
|
|
1
|
Interview and meet with the Senior Policy Advisor, project BEE Team and other technical staff to understand the scope of the assignment and agree on the activity plan.
|
Within 3 weeks
|
|
2
|
Meetings and discussion with Government Departments, including (but not limited to) Investment Climate Reform Unit, Industries Department etc. to develop institutional understanding
|
Within 3 weeks
|
|
3
|
Literature Review and background meetings/interviews
|
Within 3 weeks
|
|
4
|
Investors identification
|
Within 4 weeks
|
|
5
|
5-7 Meetings with investors
|
Within 10 weeks
|
|
6
|
2 FGDs each at two locations
|
Within 10 weeks
|
|
7
|
Summary of shortlisted investment impediments
|
Within 10 weeks
|
|
8
|
Follow-on meetings (5-7) around key impediments
|
Within 14 weeks
|
|
9
|
Regulatory review
|
Within 14 weeks
|
|
10
|
Analysis on key impediments
|
Within 14 weeks
|
|
11
|
Draft Report
|
Within 16 weeks
|
|
12
|
Stakeholder session of deliberation with ICRU
|
Within 18 weeks
|
|
13
|
Final Report (to be submitted to USAID)
|
June 15, 2018
|
-----------------------------