Page 72 - CMA Journal (Sep-Oct 2025)
P. 72
S B
Strategic SWOT Overview of SEZs in Pakistan
The following provides a brief overview of the SEZs using the SWOT framework and does not represent a detailed analysis
STRENGTHS WEAKNESSES
SEZs offer tax holidays and duty-free import of machinery, unlike Weak governance and institutional capacity undermine
standard industrial zones which have limited fiscal incentives. management and accountability.
Projects like Dhabeji SEZ have the potential to create 80,000 jobs, Rent-seeking by interest groups leads to corruption and
contributing significantly to employment. misuse of incentives.
Pakistan leads the Digital Foreign Direct Investment (FDI) Ineffective dispute resolution and ongoing bilateral
Initiative by the World Economic Forum (WEF) and the Digital disagreements over projects create geopolitical risks,
Cooperation Organization (DCO), attracting cross-border discouraging investors.
investment in the digital economy, especially in emerging Regulatory hurdles and unclear policies create uncertainty
markets. for investors.
SEZs increase exports and strengthen global market presence, Structural bottlenecks from inadequate infrastructure and
unlike many conventional industrial estates focused on domestic utilities hinder operations.
markets. Procedural complexities and bureaucratic red tape delay
Strengthens vendor industries and supply chains, enhancing approvals and implementation.
local ecosystems. Weak legal and social protection for workers causes criticism
SEZs are developed with enhanced transportation links, and labor unrest.
including the 184 km Bannu Economic Zone–M14 motorway Misuse of allotted land for real estate speculation diverts
road, improving access to regional and international markets. focus from industrialization.
The Islamabad Model Special Economic Zone aims to foster the Tax evasion and exploitation of fiscal incentives erode policy
growth of low-carbon footprint industries, contributing to credibility.
environmental sustainability in the region. Limited local community inclusion and reliance on
Low-cost power supply for industrial units, with zones providing offshoring hinder ownership, sustainability, and local value
gas, electricity, and utilities at zero-point and allowing developers chain development.
captive power generation.
Low-cost access to international markets, with the Bin Qasim
Industrial Zone in Karachi, Sindh, spanning over
25,000 acres and leveraging proximity to the port.
S W
SWOT
THREATS
O P P O R T U N I T I E O T THREA T S
OPPORTUNITIESS
Expanding SEZs to IT, tourism, services, and female G eo po liti c
Geopolitical instability, such as regional tensions and
entrepreneurship zones. insur ge
insurgent
insurgent activities in Balochistan and Khyber Pakhtunkhwa,
Simplifying approvals and empower regulations to foster an n threatens SEZ operations.
investor-friendly environment. Environmental concerns, including untreated industrial waste
Publishing comprehensive SEZ FDI and debt data to build discharged in Hattar Industrial Estate, can harm local
investor confidence. communities and ecosystems.
Disclosing contracts and conduct independent audits to Dependence on imported energy and raw materials makes
enhance transparency. SEZs vulnerable to global economic shocks and rising
on
Strengthening governance and inter-ministerial collaboration commodity prices.
for effective execution. Tighter global financial conditions can limit access to credit for
Ensuring bonded warehousing and customs facilities for SEZ developers and foreign investors under CPEC projects.
smooth trade. Bribery and unethical practices in SEZ administration can
Offering five-year income tax relief to expatriates for deter legitimate investment.
technology transfer. Inefficient use of land and resources in SEZ planning can lead
Appling clear development standards and land thresholds for to suboptimal economic outcomes.
or
quality SEZs. Overcrowding of industries within SEZs can lead to
Granting GST relief on utilities to support export-oriented competition for resources and market share.
industries. Rising costs of raw materials and labor can erode profit
Establish concessional financing facilities to accelerate margins for SEZ-based industries.
industrial unit setups. Earthquakes, floods, and climate change induced events can
Government reforms (2024 Green Pakistan Investment) damage SEZ infrastructure and disrupt operations.
enhancing sustainability and investor confidence. Influx of external workers and businesses can marginalize
Relocation of Chinese industries under CPEC SEZs facilitates local communities near SEZs.
ob
technology transfer, skill development, and generates new job Trade restrictions and tariffs can hinder SEZ products from
opportunities for the local workforce. reaching international markets.
Insufficient digital infrastructure hampers innovation and
e-commerce activities in SEZs.
SOURCES o https://s3h.nust.edu.pk/wp-content/uploads/2021/04/Opportunities-and-Challenges- 5. Provincial & Local Government Reports
of-Special-Economic-Zones-under-CPEC-for-Pakistan.pdf o https://nipapeshawar.gov.pk/KJPPM/PDF/CIP/RG-2.pdf
1. Government & Policy Documents o https://www.invest.gov.pk/sites/default/files/2020-06/Final%20Report%20of%
o https://invest.gov.pk/investment-regime/reasons-to-invest-in-pakistan 20Dialogue%20on%20Special%20Economic%20Zones%20Challenges%20and%20 6. News & Media Articles
o https://www.invest.gov.pk/sez rospects%20for%20Pakistan%206%201%202020.pdf o https://www.brecorder.com/news/40354679
o https://cpec.gov.pk/project-details/53 3. Central Bank & Financial Reports o https://www.arabnews.com/node/2583748/pakistan
o https://sezmc.gos.pk/dhabeji-special-economic-zone-proposed/ o https://www.sbp.org.pk/reports/annual/arFY21/Chapter-07.pdf o https://www.dawn.com/news/1519479
o https://cpec.gov.pk/brain/public/uploads/documents/ActionPlan2025-2029.pdf 4. International Organizations o https://www.dawn.com/news/1879628
2. Academic & Research Papers o https://www.state.gov/reports/2025-fiscal-transparency-report/china/ 7. Trade & Regional Cooperation
o https://uog.edu.pk/downloads/journal/5_Special_Economic_Zones_SEZs.pdf o https://www.state.gov/reports/2025-fiscal-transparency-report/pakistan/
o https://pide.org.pk/research/special-economic-zones-and-the-state-of-pakistans-economy/ o https://openknowledge.worldbank.org/bitstreams/eb9d1d12-a7c6-4991-a00a-1 o https://thedailycpec.com/cpfta-phase-ii-expands-trade-opportunities-for-pakistan/
o https://iips.com.pk/the-evolution-of-special-economic-zones-in-pakistan/ 50b2722e44/download
70 ICMA’s Chartered Management Accountant, Sep-Oct 2025
