- Country achieves exceptional progress in ease of doing business
- Public Sector Companies must improve their governance and efficiency
Interview of Mr. Awais Yasin – Member, National Council and Chairman Research and Publications Committee, ICMA Pakistan
PAGE: Tell me something about yourself please:
Awais Yasin: I am a fellow member of Institute of Cost & Management Accountants (FCMA) of Pakistan and have done LLB from Punjab University Law College, Lahore. I have diversified experience of more than 18 years in Corporate laws & Secretariat practices in different renowned listed and public sector companies. Being part of senior management, I remained involved with the Board in the strategic decision making process of different organisations regarding business growth, investment opportunities, procurements, finance, corporate and legal matters and guide the Board as per applicable laws and best corporate practices.
I am also approved Trainer for Directors Training Program of ICMAP and IFC. I have compiled a book on Corporate Laws & Secretariat Practices and written various articles in different Journals and Magazines. I am certified Directors from LUMS and currently working as Company Secretary of LESCO. I am Member of National Council of ICMA Pakistan, Board member of LESCO Housing Foundation.
PAGE: How would you comment on the regulation of the corporate sector in Pakistan?
Awais Yasin: Well, the corporate sector in Pakistan is being regulated by the Securities and Exchange Commission of Pakistan (SECP). SECP, being an independent and autonomous body, playing its due role for promotion of corporate sector in Pakistan and providing safe opportunities to the investor. On one side SECP is facilitating the private sector by reducing the regulatory burden and simplification of laws. It is continuously making reforms in the company law intending to facilitate corporatization and promote the development of the corporate sector through the use of technology and electronic means in the conduct of business and regulation.
One of its aims is also to ensure protecting the interests of shareholders, creditors, and other stakeholders, including the general public, in the corporate and business sector. One important goal of SECP is also to inculcate the principle of good governance and safeguard minority interests in corporate entities and provide an alternate mechanism for expeditious resolution of corporate disputes. SECP has issued a Code of Corporate Governance and other regulations for designated classes of companies, including listed companies, public sector companies, and insurance companies for mandatory compliance. On nutshell corporate sector in Pakistan is flourishing under the supervision of SECP.
PAGE: Corporate law involves the regulation of rights and obligations pertaining to corporate entities, inclusive of formation, operation, management and ownership. Your perspective:
Awais Yasin: Yes, corporate law involves the regulation of rights and obligations pertaining to corporate entities and it is one of the main goals of the SECP. The corporate laws have well defined boundaries regarding rights and obligations and separated the role of management and ownership. The corporate sector in Pakistan has achieved visible growth but still a lot of milestones are on its way forward. The corporate laws are providing adequate opportunities to all stake holders to enable the good business environment in the country.
PAGE: What is your take on local, multinational and public limited companies?
Awais Yasin: The local, multinational and public limited companies have different domains and dynamics of operations and all of them are collectively playing their due roles in the economic development of Pakistan. Yes, the operating and regulatory environments, infrastructures facilities and productivity may be different.
As said earlier the corporate sector in Pakistan is flourishing gradually. There are few groups having good corporate set-up and companies are listed on the stock exchanges. Recently three Pakistani companies are included in Forbes top Asian companies. Apart from a few big entities, the local companies in Pakistan are mostly in the SME sector and a major portion of them are operating in the informal or undocumented economy. The Pakistani SMEs are playing a critical role in the economic growth, progression of technological innovation, sourcing to large industries, including multinational companies and cottage industries and promoting economic revival and social development. Their contribution to the national economy as compared to SMEs in other countries may be less but their significance cannot be denied. It is good to know that the present Government is focusing on SMEs and coming up soon with a new SME policy 2021. The multinational companies are also contributing immensely towards Pakistan’s economy and enjoying some special benefits as well which the local companies are not. Pakistan is providing lucrative incentives to foreign companies with good returns and taking every measure to improve the ease of doing business for them. We have signed double taxation treaties with many countries to protect foreign investors. MNCs have been playing a key role in shaping our economy and providing employment to a large segment of the population. One thing is to be noted that MNCs are cash-rich companies and come with full force with the backing of their respective governments whereas local investors do not enjoy the same benefits. The Government must make it mandatory for MNCs to transfer technology and localize the production of their raw materials, including engineering components so that we can minimize our imports which are quite high. There is lot of gap available for improvement in Public Sector Companies (PSC). A lot of PSC are not sustainable and operating in losses for a very long time. The government shall have to fix its priorities to come out of such heavy losses and make these PSC sustainable. PSC have to improve their governance and efficiency for which the government needs to bring structural reforms and make them sustainable and profitable so that they can play their due role in the economic growth of the country. The Governance system in the PSC required priority and major focus is needed on transparency, merit and fairness. The cost and management accountants may be associated as consultants and advisors in all the public sector companies (PSEs) to advise them on how to bring cost-efficiency.
PAGE: Has doing business become easier in Pakistan?
Awais Yasin: Yes, there is no doubt that current government has taken a lot of steps for ease of doing business (EODB) in Pakistan and these efforts were recognized worldwide. Though there are still a few areas where improvement can be brought; but during the last two years, Pakistan has made exceptional progress in ease of doing business. The present government under the leadership of Prime Minister Imran Khan is giving special focus on EODB reforms and as per the World Bank’s Ease of Doing Business Report 2020, Pakistan improved 39 positions in EODB ranking in the last two years and was placed at 108th position. Pakistan was recognized as the top reformer in South Asia and the sixth reformer in the world. The following reforms made by Pakistan was recognized and acknowledged by the World Bank in its Doing Business Report 2020:
- Company can now be registered in one day with SECP& FBR. Data is transferred to Labour Dept, PESSI, SESSI, and EOBI in real-time. Only the SECP portal is used. End to End integration of 9 departments has been made.
- Getting construction permits now takes 108 days in Lahore and 134 days in Karachi as opposed to 266 and 261 days originally.
- Commercial property can now be registered in 22 days in Lahore and 149 days in Karachi instead of 25 and 208 days previously.
- Commercial electricity connection can now be obtained in 73 days in Lahore and 134 days in Karachi as opposed to 117 and 185 days in the previous report. Online portals of LESCO and K-Electric have been launched. Tariff changes are announced in advance.
- Online payment of Taxes has been introduced. The numbers of payments are now measured at 34 from 47 and the time for paying taxes has reduced substantially. Tax rates for small companies were reduced from 25% to 2 4%
- WEBOC Customs software has reduced time to export for border compliance from 75 hrs to 58 hrs and time for Imports for documentary compliance from 143 hrs 96 hrs