exempted and left untouched. Thus, the risk of expropriation of foreign capital is
almost zero in Pakistan.
Foreign investors are treated at par with domestic investors for purposes
of equity ownership, access to domestic financial market, tax and tariff regime
and legal rules and regulations. This level playing field is one of the strong and
distinctive features that make Pakistan an investor-friendly country.
The other pillars of good governance are, (a) devolution of power to the
local governments who will have the administrative and financial authority to
deliver public services to all citizens, and (b) an accountability process which will
take to task those indulging in corruption through a rigorous process of detection,
investigation and prosecution.
The cornerstone of the governance agenda is the devolution plan which
transfers powers and responsibilities, including those related to social services
from the federal and provincial governments to local levels. This plan was put
into effect in 2001. The development effort at the local level is expected to be
driven by priorities set by elected local representatives, as opposed to
bureaucrats sitting in provincial and federal capitals. Devolution of power will
thus strengthen governance by increasing decentralization, transparency,
accountability of administrative operations, and people’s participation in their
local affairs.
Other essential ingredients for improving economic governance are the
separation of policy and regulatory functions, which were earlier combined within
the ministry. Regulatory agencies have been set up for economic activities such
as banking, finance, aviation, telecommunications, power, oil, gas etc. The
regulatory structures are now independent of the ministry and enjoy quasi-judicial
powers. The Chairman and Board members enjoy security of tenure and cannot
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