High Cost of Doing Business is Limiting Pakistan’s Competitiveness: ADB Director

“The high cost of doing business limits Pakistan’s competitiveness,” said Asian Development Bank (ADB) Country Director for Pakistan, Xiaohong Yang.

She said that a robust private sector is critical to Pakistan’s goal of achieving upper-middle-income status. Further adding, “Unreliable access to basic infrastructure is also a significant constraint for private sector activities, while access to finance remains limited for women entrepreneurs, small businesses, and other underserved segments,” Business Recorder reported.

The statements by the ADB director were published by the Bank under “Boosting Growth, Resilience, and Competitiveness in Pakistan,” on its website.

Pakistan has the potential to become a regional hub for trade and economic activity, but greater cooperation is impeded by weak connectivity and trade links, the statement said.


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Yang added that through its membership of the CAREC and other regional platforms, Pakistan could continue improving connectivity, developing multimodal transport systems, and strengthening cross-border trade.

She said that the ADB would support the Pakistani government in implementing tariff and tax reforms.

The streamlined import tariff and tax procedures will help private businesses thrive and facilitate export diversification. The ADB targets reforms that boost competitiveness, private sector development, create jobs and drive market innovation.

Pakistan has struggled with boom-and-bust cycles in previous years due to low export capacity, weak domestic revenue, and other systemic challenges, read the statement. This was further worsened by the COVID-19 pandemic, which caused a sharp downturn in 2020. ADB predicts this to likely push even more people into poverty.

Yang said that around a quarter of the population lives below the poverty line while a further 20 million are near-poor and highly vulnerable to shocks. Pakistan also has the second-highest number of out-of-school children in the world while there is significant divergence in health outcomes among the population.


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The ADB will seek to enhance productivity by improving education, nutrition, health systems, clean water and sanitation, affordable housing, and social protection. It will also work towards the promotion of system-wide reforms on skills development and investments in secondary education with a special emphasis on increasing girls’ enrollment.

Gender inequities continue to be a significant challenge in Pakistan with low literacy rates and labor force participation for women, the statement added.

The ADB is currently working with Pakistan to access the ADB’s Asia Pacific Vaccine Access Facility – a $9 billion resource envelope with country-specific allocations, accessible in line with our members’ readiness, the director’s statement said.

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