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Pakistan Group Special Technological Zones (STZs)

Ameer Hamza

Paskistan Group Special Technological Zones (STZs)
Paskistan Group Special Technological Zones (STZs)

The LUMS Energy Institute and the Institution of Mechanical Engineers (IMechE) Pakistan Power Centre organised a seminar on "Special Technological Zones (STZs)" on 23 May 2024.

The event underscored the benefits of STZs, including modern infrastructure, tax incentives, and streamlined regulations, making them appealing to both local and international investors. Key participants included Dr. Fiaz Ahmad Chaudry, Hassan N. Ansari, Dr. Muhammad Uneeb, and Aamer Saleemi. The seminar also explored the distinctions between STZs and Special Economic Zones (SEZs) and discussed their roles in fostering Pakistan's industrial growth and economic development.

Event Detail

Hosted by Dr. Fiaz Ahmad Chaudry, Director of the LUMS Energy Institute, the seminar provided a comprehensive look at the advantages of Special Technological Zones (STZs). Hassan N. Ansari, CEng FIMechE, delivered a detailed presentation on STZs, moderated by Dr. Muhammad Uneeb, CEng FIMechE, Chair Middle East & Africa. Aamer Saleemi, Executive Director/Member of the STZs Authority, also contributed as a panellist.

STZs are designed to create a conducive environment for tech companies, startups, and research institutions to collaborate and thrive. These zones offer modern infrastructure, tax breaks, and streamlined regulations, attracting both local and foreign investment. The aim is to foster technological and industrial advancements by minimizing bureaucratic obstacles, with direct oversight from the Prime Minister's Office to ensure rapid development and innovation.

The seminar highlighted the differences between STZs and Special Economic Zones (SEZs). While STZs focus on technology and industrial advancements, SEZs, introduced during a 2005 visit by the Chinese President, have a broader economic scope and regulatory requirements, including approval from provincial Boards of Investment. Key SEZs in Pakistan include Rashakai, Dhabeji, Allama Iqbal Industrial Park, and Quaid-e-Azam Business Park, all of which have significantly contributed to the country's industrial growth. The first private sector SEZs emerged in 2020, marking a milestone in Pakistan's economic development.

Paskistan Group Special Technological Zones (STZs)

Requirements and Objectives for STZ Development

To establish an STZ, developers must meet specific criteria, including a minimum of 5 acres of land or 250,000 square feet of contiguous area. Collaboration with universities is essential, and targeting technologies or products banned in Pakistan is prohibited. Developers must demonstrate clear economic objectives, such as job creation, technology development, research and development, and technology transfer.

Power Consumption and Economic Impact

The seminar also addressed Pakistan's power consumption, highlighting that industrial usage stands at 28%, domestic at 49%, agriculture at 8%, and commercial at 7%. In comparison, developing countries typically have a higher industrial load than domestic load, with India having an industrial load of 42%. The development of STZs is expected to promote industrialization and increase the industrial load, thereby helping to reduce the circular debt currently affecting Pakistan's power industry.

Additionally, the seminar drew comparisons with other countries' economic growth. Over 35 years, Turkey's GDP rose from $1,600 to $12,542. Malaysia's GDP reached $11,183 in 30 years, and China achieved a GDP of $12,720 in just 31 years. Thailand's GDP increased to $6,593 over 20 years. In contrast, Pakistan's GDP declined from $1,641 to $1,588 in 2023, underscoring the need for robust economic strategies like STZs.

Paskistan Group Special Technological Zones (STZs)

Broader Scope and Future Potential

In conclusion, STZs encompass more than just IT hubs, extending to fields such as aerospace, renewable energy, and advanced manufacturing. Success depends on addressing educational and skills training gaps and developing industrial clusters that synergize with SEZs, Free Trade Zones (FTZs), Industrial Estates (IES), and Business Parks. This integrated approach is crucial for creating a strong industrial ecosystem, leveraging the strengths of each zone type for comprehensive economic development.

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