Pakistan’s small manufacturers are facing severe pressure from escalating global compliance requirements, with a new World Bank report revealing that meeting European Union (EU) regulatory standards alone can cost up to €200,000 in the first year, more than the annual sales of many local firms.
In its World Development Report 2025: Standards for Development, the Bank noted that small and medium manufacturers of surgical instruments in Pakistan face recurring compliance expenses of €30,000 annually after the initial outlay.
Most firms in the sector employ fewer than 20 workers and generate annual sales of €20,000 to €300,000, making regulatory compliance financially prohibitive.
A Pakistani textile exporter reported spending about $5,000 per year for each of 15 sustainability standards required by international buyers, even when many certifications cover similar criteria but require separate audits.
The report said global standards have expanded dramatically over two decades and now function as critical economic infrastructure shaping global trade. While standardisation—such as the adoption of shipping containers—has boosted global commerce, modern standards also act as non-tariff barriers, now affecting 90% of world trade, up from 15% in the late 1990s.
The World Bank cited several Pakistan-based studies: performance pay for tax collectors in Punjab increased revenue by 40% within two years, while enhanced autonomy for procurement officers led to 9% lower goods prices, fewer delays, and no decline in quality or corruption outcomes.
World Bank Chief Economist Indermit Gill said developing countries must actively engage in setting international standards to benefit from them. ISO Secretary-General Sergio Mujica added that widening global participation is essential for equitable development.
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