e

Scctors
Socien & Pakistan Affairs
Land. People. To
augment the pace of
Works was created NOA
National
Education Policy
(2017-2025)
ot
Feaerai Eaucati0n
oi Pakistan
educ
T
The equipment. to industrialization.
cater the needs
of
the
Shipyard and
announced by the Mnist
or poimonon o
of the
nigher
1-23 age group:
The Pakistan
CTeated in Council of
engineering matenal,Engineenn
plau
is pobcy was

and argets
poposod
to 1995 to Scientificand
ma
porams
inom the
cumeni ' 7tIeiseea
areas to
Tesources. develop technologies
Industrial Research
utilization of (PCsIK
asE
acres
milegeS pudlic science and The for IR)
c oomunity i
ew

son Pakistan Industrial

indigenous
estabish

sector almost
Oestabishing
private
0ne
manponer:

simultaneously Development
a e S
of
onpetent
sub-camDI1sa
Corporation
establishnment

Ce d
technicaly
aciltate the ncrease
numoer of es
industries such as
to serve
as the (PIDC) was createa
UverSides: sub-campuses: ot working
me feel shy. cement and in those recipient of
e r s i t e s .
set up 7 smart

provide
education
at the aoorsteps

alldegree
grantino
nting
Government set up Small
for which technologies
private
in
neavy
ia
taiversities to
high speed
connecavino
Locumentatio investment may
or
enhance u s e of tor Ora
and
Banks and Industries
Financial Institutions
ana
women: and
The Policy provisions
proposed
senices
pronmote
the readine
g
industrialization in the
Corporation in 1972.
have
(DFI's) have played an country. The played a major roie in assisting
12sutons

quality of ibrar
modern tacilities including internet
the
level
Seiees are. improre

the
ibrarnes
th
upP
to
the union
council
competition Development Financial
important role in growth of
Cture equip
extend the network of branes

ana capacity Ouilding

of library
Education
such
in the

institutions tointernational market.

instirution8
industry despite tougn
the needs andGovernment had also set
conect: services:
Pnysical cater
nToduction of mobie ibrar recommended
on

policy provisionsc u T i c u l u m Ior grade

I-v; pre and in
n-
example, PICIC, ADBP and demands up
main set up named RDFC. of
industry.
poressionals.
The
formulation of annual Sports week
The
Khushali Bank. Similarly, a micro-cTedit
bank has been
For
Health and Sports are

teachers in physical educauon,

at
provincial level a s government has reorganized SMEDA
sernice taining of
of physical
education
and sports coileges
iealth, Physical Education Development Authority) to
provide (Small and Medium
estabishment
separate
directorate 1or or special children
investors. technical assistance Enterprises
wel as a university:
recommended.
and a
The target of participaion rate
creating
inclusive learning Current Statistics
to
potential small
and Sports is 2025. Besides,
all levels. The
fixed as 50% by insutuions at
has been
in 50% existing
formal
education
access to special need Industrial sector recorded growth of 7.2
a
environment

enunciated
include expanding
Education; provision rOwth in percent in FY2022
FY2021.Industial sector performance
provisions Special compared to 7.8 percent
main

children:
poiicy
allocation of 5°o of
education budget

teaching learning
aids; transport
for
facilities for all Manufacturing sector while have a
is
share of 65 more
dependent on on the
of modern technologies
and
in-service
staff development
training and
of
However within Manufactunng, percent in industry.
of basic
the special
education
institutions;

of Special
Education
lnsututions; provision
sensitization of
while its share in the industry is Large-Scale
48 percent. Manufacturing (LSM) holds 74 percent
tacuity and management
education; and training and
facilities and services for inclusive
inclusive
education. During Jul-Mar FY2022, the
QIM index posted a
general
education teacher regarding components of Manutacturing, Small Scale, and
growth of 10.5 percent. The other
Industry in Pakistan
percent and 6.2 percent, respectively. Thus Slaughtering posted growth
a of 8.9
percent while mining and quarrying Manufacturing
posted negative growth 4.5posted growth
a of 9.8
24% of GDP. Cotton Similarly Electricity, Gas and Water percent.
about
of Pakistan accounts for Supply the other subsector of
growth of 7.9 percent. Finally, Construction
Industrial sector
manufacturing are Pakistan's largest industries,
recorded a modest Industry posted
textileproduction and apparel and almost 40%% of the growth of 3.1 percent.
accounting for about
66% of the
merchandise exports

industrial sector is one

of the main pillars of
Pakistan's Current Problems in Industrialization
employed labor force. Hence, suffers from various
structural
Pakistan is
economy. The manufacturing
s e c t o r of Pakistan
and exports. These
facing these problems in
industrial sector.
rates of investment, output,
problems resulting in slow growth
include among others lack diversification,
allocative, technical, poor quality
of
rates of
Energy Crisis
of R&D activities resulting in slow growth
products, and low levels
market. However, Energy crisis is a major problem faced by industries in Pakistan. There is not
Pakistani uncompetitive in the world
products Scarcity of electric power but also, there is a shortfall of gas in the only
productivity making
Especialy, when the demand peaks, domestic segment is accommodated ascountry.
industrial sector is one of the main pillars of Pakistan's economy.
part of
government policy. Thus, industries face shut down for hours and even days.
Policy Overview Moreover, energy crisis raises production costs, also a detriment to industries. The
S o o n after partition, the first industrial estate was established beyond already poorly performing sector has witnessed a flight of capital owing to energy
Lyari Karachi at the present Sindh Industrial Trading Estate (SITE) crisis.
Karachi.

140 141
 & Sectors Pakistan Affairs tficer

People,
Society
egulatory and
Legal NOA
o
Land.
Pakistan has
crh Pakistan
Though Environment
her ranking in terms strived
NOA to
for l improve the overall
Law and Order has
Deen
conomic
Vety
uniavorable

growth a
growth and
nc vice versa rcgulatory and de-regulation
Iegal lramework. has husiness clinate and
improved, weaknesses accordingiy
country
Exce
e c o n o m i c

of the to
weak
encics often
enforcing agencIes otten lead to hExCessive still remain
due

discretionary
situation

corupt1on resulting the loss ofharassment of the hands in

l a w - a n d - o r d e r suffered

The industries
in powers in
activities.

Consumption
Similarly.
based Econommy
Accordin to GD To develop aviable
business enterprises
confidence. and
opens up
ot
avenues 1o
tne
based
economy.
au
8.3
peTCCnt of ChD .
by
ce vironment
Jegal environnent industrial sector, there
that 1s
is
a
consumption-
a v e r a S e d

of the
must be put in conducive for
for to put
Pakistan
is
primarilr

price.
consumpion
Investment
to GDP ratio
i y is
TCB cisions with place for over private businesses. inplace reguiatory and in
a

confidence. We may longer

market a
period to allow particular the tarill
production
expenditure
at
91.9
perTCent. sectors
largely
and
currentiy
it is at
that
the ndustrial
T e s u i tantly,
industr
a n t l y , industrial base is en the major stumbling note that
lack of producers to take
continuity policies long
I960 means
suier ana, block to a
1 5 c u r r e n t v .
which
market.
Hence,
exports
segment.
. Weak Infrastructure
increased investment. nas
in
indigenous the export
tocusing dominating
sector
with textile
weas leak physical intrastructure has
L a c k o f Diversification
i o r exploung the
In the dynam
by opportunities offered
the manufacturing sector. Whereasbeen a
najor factor
hindering the performance oi
industrial
sector isessenual aversication.
industrial structure lacKSp r o d u c t s , Pakistan ha
deterioration ot physical the lack of repair and maintenance has resulted
A
broad-based

but
Pakistan's and
metal rdly stilities have contributed to inírastructure, inefficiencies
ization. either
by high costs of in the
competitiveness ot domestic manufacturers. production, thus public
machinery,

ei.mbly
dominated
compising
electronics.
sector is sector
basic
areas
progress.
whle the engineering

or the production
of and
eroding the
made any
imported parts, to develop a strongg
capita Transportation
been aDie
based on
has not
operations Pakistan manufacthurin
irn total is
components.
Furthermore.

the engineering
indusuies

led to bi
An efficient transport network is
transport sector 1s incurring heavy vital
oi has
sector: the share inaustial
Dase
for economic
development. In Pakistan. the
narOW
gOods surprisingly,
a
manufactured exno
low. Not asset losses due
abrsmaly
roughly 60 percent
oI the cOunuys
isting facilities. The
exist to the
concentrated exports:
textiles and clothing and
carpets
and rugs.
enormous costs on theunsatistactory
economy.
state of the
The
inadequate maintenance of
transportation network has imposed
Consist of oniy
trafficking sufter from inetticiencies. Duerailways
to
that are cost
effective for long haul
Role of the Public Sector modes, the bulk of the freight is higher costs of alternative
trucking industrytransportation
sector has been drasticaly
curtailed a s a result of overuse of the road network. handled by the
Though the role
of the public
ndustries continue
to be dominated bu resulting in
poiicies, some
deregulatton and privatization
Some ot these enterprises produce
primary r a w materials
The quality of air and
shipping services is
state owned enterprises. of the public sector have a n lack of competition. The
freight marginally better but costs are
high due
and intermediate inputs
and as a result the
inetficiencies

the i n e t i c i e n c i e s of Pakistan reckoned to be several handling costs at the ports in

Karachi and
industries. For Example, times higher than those oi areQasim
adverse impact on downstream Furthermore, upcountry
block to engineering
industries.
industrial centers comparable ports in the region.
Steel have been the major stumbling face even are
particularly at a disadvantage
higher costs of as they
Karachi port. transportation oi raw materials and other
Biased Trade Policy inputs from the
bias for certan critical sectors such Human Resource Development
The trade policy still has an import substitution
as automobiles, whose imports are subject
to tarifi peaks. The continued protection

to these sectors has not helped these enterprises to become globally competitive.
It Pakistan is deficient in the skilled
human resources that vital for
not be a advancement. More specifically,
are
technological
must, however, be recognized that protectionist policies
viable strategy may educational institutions is
the
quality scientiic manpower produced in the
of
in the
emerging multilateral trading system. Moreover, the protectionist policies
encourage imports on the cost of local market and production, thereby, restricting
poor due to a number of factors
qualified professional teaching stati. Moreover, including a lack of highly
the best students are because of higher returns elsewhere
the
growth and development of local industry. not opting to
pursue careers in science and technology.
Smuggling and Higher Cost of Domestic Production Furthermore, the skills
imparted in
various polytechnics and the vocational
institutions are not demand driven and
There is widespread smuggling and that adversely impacted the growth of many has resultantly most of the skilled workers that
industries, especially consumer goods. graduate from these institutions fail to get a
job. The productivity of various
Domestic producers cannot
Smuggied goods. Moreover, the cost of domestic manufacturing is elevatedcompete
due wuoa ndustries is adversely affected due to lack of skilled workers and some of the
number of
factors including higher power and energy prices, labor levies to
naustries are not established because of the lack of requisite skilled workers. In
to build a sound
an increase
in efective wage rates, high rates of sales taxes, and a that ica of orer and diversified production structure in the industrial sector,
corporate and income high aeE rakistan needs to attach
high priority to human resource development.
taxation

143
142
 & Sectors
Land. People, Society
Pakistan Affairs
fic@re

NOA
among firms across ,ofticer
Science and Technology
environment,
sCience and technoloom.
state of scien
components and parts, hascountries.
Changing
NOA
ln a rapidly changing
international

development
economic

momentum.
UntOrunately,
the

Compared with 0the wider arrayRequirements

ot
increased
for
Intra-industry trade,
sharply over time. especia
ecrUne

cially in
7tal for sustaining
technology has
the
been far
less
s a t i s f a c t o r y in r a s t u

strong engineering
as
Ioundations and the
losa of Similarly,
basic
Occupational Economic
information skills is Inírastructure: An
A Newifrastructural technology and
and
Pakistan lacks
the
of
development
the count
untry' required to increasing
iramework for logistics have compete
economies.
hindered
emerging be attributedt Global become eífectivey.
further
has may also
qualified personnel
of science a n d technology
capacity of the domesti
Organization, Trading Regime: industrial part of
With the development. the
state
base. The poor and
technological
relatively low
awareness
of technological
needs

and escaren institutions, and agreements production

and countries structures advent of the
the
industries, the weak
link between industry, academla,
t e c h n o l o g i c a l development.
To prena:
pare methods, legislations, have are World
become influenced by the various Trade.
a lack oi
resourcesfor scientific
research and
the development or sclence and technolo
industi
manufacturing and
New Patterns structures each trading
of interdependent. The
relationships
to face emerging challenges,
to the f o r e i r o n t of the trial of
country. governing
are
influence to
has to be brought
multilateral tradingGeographic Division
the country
with industry recentty, it is just the tintip of the
and its interface been initiated
work has of Labor:
Vision for the future.
While some
regionalism and morearrangements there have Whereas WTO calls for
the iceberg.
Lack of Credit
Facilities
Remedies of IndustrialrecerntlyProblem
FTAs with been
movements towards
various countries.
and finance
facilities for
SMES (Small and Medium
crunch set in. In Pakistan
.Remedies of Energy Crisis
In Pakistan availability of credit since the energy
have been very low, especially of the corporate crisis has
been
Enterprise)
depends heavily
credit
on the appetite lafed projects draining the
capital out of the
the total bank lending. There are
the growth in bank credit

s e c t o r , which currently
receives nearly 70
percent of
in tocusing exclusively on
the d1strial sectorsunderway it is
would be met.hoped that, soon country. However, with
of this heavy
concentration,
segments like SMEs. In case of
Net Metering has also
given viable Moreover, the energy demands of domesticenergy and
several repercussions other niche
a
option to encouragemernt of solar
corporate
SMEs,
banks have marginalized
sector,

important distinction
an
has been a very high loan
shortages i n
delinquency that banks
the country, and slowdown
Development of Infrastructure the industry and the investors energy and
alike.
faced between FY08 and FY13;
severe energy
had a very strong, negative impact on
The
government should step-up the
in both domestic and
international economy
Since then, banks havve Estates, under the
umbrella of establishment of
China-Pakistan Economic Corridor
in detault rate.
which led to a rise Zones and Industrial
financial position of SMEs, envisaged under CPEC. This
been extremelycautious in lending to this sector.
construction of roads and economic corridor Economic
is ideal as (CPEC), as
highways, necessary for the
it envisions the
Industrial Policy Guidelines Human Resource Development growth of industries.
sector of better
Pakistan was much
While performance of the manufacturing been fractional The most important
to the 1980s, it has contributor
compared to other South Asian countries up
Asian countries. No
doubt in recent years, the Development. The need to developtowards
and
industrial development is
the ability of workersHuman Resource
compared to South East
well but as pointed out
earlier sustainability is
era of change, which
is reilected upgrade is crucial in this
manufacturing sector has performed sustainable
by
technological innovations, and increasing the
ever-changing industrial structure,
the issue. Pakistan has to make important
strategic choices to e n s u r e
in the manufacturing sector.
trainingcan only
in turn are
produce results if it meetsshortages of skilled workers.
the demands of the Vocational
growth governed by the needs of the economy labor market, which
Product Life Cycles: The technological innovation
nature of resources have to be made available as a whole.
Skilled manpower
Shortening so that the
and consumer demand has created an new products
environment for can be
effectively implemented. development programs of the country
those
whose lifecycles are relatively shorter than before. Therefore, only The private sector should be
encouraged to expand
producers who remain competitive through heightened applications, Greater access to
its involvement in skills
training.
innovation, and quick responses to consumer demands will
be able to credit, exemptions
of import duties on
certified institutions and training equipment by
survive. agencies, could be offered as incentives. There
may be
Complex Global Marketplace: There has been change in the public-private partnerships where the government
1s important to ensure proper regulation through provides
A More a seed money. However, it
demand patterns towards sophisticated consumer
products. Traditional levels of fees, conduct of
the determination of
appropriate
products such as food and textiles account for a very small proportion ot proper examinations, and the establishment of proper
consumption in the developed world. Moreover, even for the traditional
certification procedures.
products the consumers have preferences for standardized and quality Financial Support and Credit
products.
Emerging New Industrial Patterns: The vertically integrated industrial nere is a need of policy shift in fînancial institutions: Banks. As Pakistan is an
patterns within the country may be rging economy and industrial sector is inherent to this development, private
replaced by network arrangemeno

144 145
 ers 4 & Sectors
NOA Land, People, Society
Pablcatlons
a pro nctive role in forn
regard and play
forward in this
sector should come

private partnership.
SME's Promotion
key role in devclopment of ec
The Snmall Medium Enterprises
have played a
conom
es
in providing Inpetus
to the develones
role
l1ke Japan. It has also been playing key Taiwan, Korea, Hong Kong and
cconomies like
world's best
of s o m e of the been cOncentrating their eff
Countries in South America and
India have also
SME's development requires financing f. om
developing the SME sector. However, environment and banks sho banks should
banks Government should improve regulatory
SME's financing requirements.
establish dedicated departments for handling
Investment
Promotion of Foreign Direct
government should foe
As thecountry's economic environment is under recovery, us
on promotion of FDI (Foreign Direct Investment), in a vigorous manner. Moreover
er,
also follow the footprints of China with reference to out-source of
ot
government should
manufacturing.
In-Put related Remedies
The availability of cheap raw material and easy access to in-put is the key to rapid
industrial growth, as is the case of China, India and East-Asian economies.
Therefore, provision of subsidy on input and raw material is also a remedy.

Fiscal Support
Providing relief to industry in form of tax exemption with targeted industry with a
time frame is also an effective measure to boost industry. Moreover, tax free zones are
good example of such measures.
Ease of Doing Business
Pakistan stands at 108th spot on "Ease of Doing Business 2020". Despite a 28 points
improvent in country's position, this translates to difficulties in getting electricity,
permits and licenses, getting credit, paying taxes and trading across the border.
Moreover, red-tapism and bureaucratic hurdles also falls in this category. To improve
the situatioon "One window operation" and facilitation of industrial sector
sector 1s
is
indispensable.

Society of Pakistan