Governance and Taxation: Rethinking Competitiveness of Sialkot.

Byline: UROOJ AIJAZ

Governance issue has gained importance over the last ten years and become a key component of policies for economic development. Good governance acts as a positive force to influence economic growth where, a growing amount of available evidence suggests that lack of quality governance hinders growth and investment, and aggravates poverty and inequality. In fact, governance problems foil every effort to improve infrastructure, attract investment, and raise educational standards (Harford, 2006). Governance matters significantly for a country's performance effectiveness.

Better governance will lead a country to achieve greater competitiveness. Competitiveness indicates the ability of a nation to maintain high rates of economic growth and productivity with sustained employment. More competitive economies tend to be able to achieve higher levels of income for their citizens. Governance and competitiveness may be related, but they are distinct notions. In fact, competitiveness incorporates some governance.

Sialkot District is one of the districts of the Punjab provinces of Pakistan located in the northeast of the province and is the 13th largest city by population. Sialkot is a wealthy city relative to the rest of Pakistan and South Asia with a per capita income in 2014 estimated at $2800. The city has been noted for its entrepreneurial spirit, and productive business climate which has made Sialkot an example of a small Pakistani city that has emerged as a 'world-class manufacturing hub'. The relatively small city exported approximately $2 billion worth of goods in 2015, or about 10% of Pakistan's total exports.

Sialkot has been noted as a 'world-class manufacturing hub' with strong export industries in the fields of leather, sporting goods, and surgical instruments industry. The Sialkot Dry Port offers local producers quick access to Pakistani Customs, as well as to logistics and transportation and manages its position as one of Pakistan's most prosperous cities. Its sporting goods firms have been particularly successful, and have produced items for global brands such as Nike, Adidas, Reebok, and Puma. And produce footballs for 2014 FIFA World Cup.

Sialkot's business community has joined with the local government to maintain the city's infrastructure, as the local government has limited capacity to fund such maintenance. The business community was instrumental in the establishment of Sialkot's Dry Port in 1985 and largely...