ISLAMABAD: Pakistan, in collaboration with the International Labour Organization (ILO) and the Small and Medium Enterprises Development Authority (SMEDA), has officially launched the National Roadmap for SMEs and Workers’ Formalization, marking a new era in the formalization of the national economy.
The roadmap unveiled on Thursday was developed through a year-long collaboration between the ILO, the SMEDA, and a wide network of national institutions. The roadmap outlines a clear set of priorities to simplify enterprise registration, enhance supply chain transparency, strengthen labour compliance, and support SMEs in adapting to rapidly evolving global and environmental requirements.
Special Assistant to the Prime Minister (SAPM) Haroon Akhtar Khan said that the step has added a new chapter, giving a roadmap for the SME sector and worker formalization. He emphasised that formalizing SMEs and workers is a key milestone for national development. He said that an unstructured economy cannot compete with an organized global market, and alignment with the European Union’s new trade policies has become inevitable. Pakistan urgently requires reforms to enhance its global competitiveness.”
He said that the national roadmap aims to simplify and consolidate business registration processes with a clear objective of establishing a single national firm registry under the Easy Business Act, he added. Spelling out key priorities, he said that safeguarding workers’ rights, ensuring a safe working environment, and promoting a transparent contracting system. He also referred to recent provincial reforms. He said that the new labour codes in Punjab and Sindh represent a significant step toward a formal economy. The Digital Labour Contract Portal will further enhance transparency in the labour market.
Haroon Akhtar Khan noted that the broader benefits of formalization will open doors to global markets and financial support. Digital payments, credit scoring, and incentives will integrate SMEs into the mainstream economy. Formalization is not just a government initiative; it is a national social contract, he said, while stressing the need for collaboration among the state, private sector, workers, and development partners, reaffirming the government’s commitment. He said that the government of Pakistan is committed to bringing reforms and delivering benefits to businesses, workers, and the national economy. Pakistan’s progress is tied to formalization, transparency, and a strong institutional system.
Geir Tonstol, Director of the ILO Country Office for Pakistan, underscored the significance of this milestone for Pakistan’s economic and social development. He noted that “Formalization is the foundation for competitiveness, resilience, and decent work. This roadmap reflects a shared national effort grounded in evidence, consultation, and partnership to simplify compliance, strengthen supply chains, and extend protections to workers across Pakistan. The ILO remains committed to supporting Pakistan as it moves from planning to implementation—through practical reforms, enterprise support, and stronger coordination that benefit businesses and workers alike.” The launch builds on extensive national diagnostics, field missions, and more than a dozen consultations. The initiative also builds on the ILO’s long-standing support to Pakistan on enterprise development, labour governance, due diligence, and transition to formality.
Nadia Jahangir Seth, CEO of SMEDA, highlighted SMEDA’s central role in operationalising the roadmap and emphasized that “under the ILO–SMEDA partnership, the institution has led national and sector-specific consultations, hosted the Roadmap Secretariat, established enterprise helpdesks in Karachi and Lahore, facilitated advisory services and capacity building for SMEs, supported studies on subcontracting and incentive structures, and contributed to the digital compliance and traceability platform.”
She further added that the implementation phase will focus on practical reforms, enterprise facilitation, and strengthening coordination among ministries, regulators, and industry associations. The National Roadmap for Enterprise and Worker Formalization sets a unified vision to reduce informality, strengthen protections for workers, and enhance the productivity and competitiveness of SMEs and home-based workers.
It outlines practical steps to simplify registration, harmonize regulations, and enable enterprises to comply through digital tools that improve traceability, transparency, and supply chain accountability. The roadmap supports Pakistan’s commitments under GSP+, international due diligence frameworks, and climate transition requirements, ensuring SMEs can access markets and meet global standards. It emphasizes targeted capacity building, stronger institutional coordination, and the role of large enterprises in formalizing their supplier networks.
Copyright media, 2025.
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