INDUSTRIAL
DEVELOPMENT IN PAKISTAN
Since ''Industrial
Revolution' industrialization is regarded essential for rapid development of
the country. The countries that solely relied on agriculture have remained poor
and underdeveloped, whereas the nations which gave weight to rapid development
to industry achieved high rates of development. The advanced countries of the
world, America, Germany, Great Britain, Japan, Russia, encouraged
industrialization on large scale. The advantages of technological change were
channeled into agriculture. They developed industry which also brought
revolution by mechanizations in agricultural sector. The national income
increased. The balance of payments considerably improved. There was increase in
employment. The country achieved balanced growth in various sectors of economy.
Pakistan is the sixth
largest populous country of the world and according to the State Bank of
Pakistan in its 2009 annual report of economy, 62 million population of
Pakistan was fallen below poverty line. After poverty the second largest hurdle
in the way of sustainable development in Pakistan is unrest from which people
are suffering since very long. Continuous deteriorating law and order situation
across the country is no hidden from anyone. Devil forces, terrorists are
playing with the lives of the innocent people.
Our country mainly depends on agriculture sector, approximately 70 per cent of its income comes from agriculture and 80 per cent of working women are attached with agricultural work in Pakistan. There is need to reform this process as the other developed nation do, by aware and to educate them the importance. If we bring them in this process, they will perform a very significant role. There is need to work on this. To bring awareness among the masses, media can also play an important role about the issue.
Pakistan at the time
of partition in 1947, had negligible
industrial base. Since the division of the Subcontinent, the Government
of Pakistan has been utilizing all available resources domestic as well as
external for rapid development of the manufacturing sector. Pakistan has now
attained a fairly diversified base in manufactures ranging from essential
consumer goods of chemicals steel, heavy engineering and tool industries.
Domestic production of items such as refined sugar steel, fertilizer, cement
etc has helped in import substitution and has saved substantial amount of
foreign exchange.
The
industrial performance in terms of growth/productivity is examined in the
following periods of time:
1. Growth of industrial sector from 1947 to 1950. 2.
Growth of industrial in 1950's.
3. Performance of industrial sector in 1960's. 4. Performance of
industrial sector in 1970's.
5. Performance of industrial sector from July 1977 - 1997. 6. Performance of industrial sector from 1997 onward.
1. Growth of Industrial Sector from 1947 to 1950:
It had an area which
produced a large share of agricultural, forest and animal products. Former East
Pakistan was the main producer and supplier of jute. There was not a single
jute factory in the former East Pakistan, cotton was produced but it had no big
factories to process and manufacture cotton. They were all situated in the
areas which went to the share of India. There was no steel industry are in
Pakistan, whereas India had a sound industrial base at the time of
Independence. Out of 921 industrial units operating in the British India,
Pakistan got only 34 industries i.e. 4% of the total industries
established in the Subcontinent. The rest were located in India. The industries
which came to the share of Pakistan were of a comparatively small size and were
based on indigenous raw material. These industries included small sugar mills,
cotton ginning factories flour mills rice husking mills, canning factories etc....etc.
The Government of Pakistan know the importance of industrial growth and in
order to expand the scale of production, the private enterprise was to be
encouraged to set up industries excluding the manufacture of arms apparatus.
The Government also set up an Industrial Finance Corporation and an Industrial
Investment and Credit Corporation in 1948. In the period from 1947
to 1950, The contribution of industrial sector was 6.9% to GDP in
1950.
2. Growth of Industrial Sector in 1950's.
The private sector due
to lack of capital, technical know-how, absence of entrepreneurship etc, was
shy in investing capital in heavy industries. The Government took the
initiative and established Pakistan Industrial Development Corporation (PIDC)
in 1952 to invest in those industries which require heavy initial
investment, have a long gestation period, require high degree of know-how. In
the First year Plan Year Plan 1955-60, a sum of Rs. 185.11 corer
was allocated of the growth of industrial sector. A large number of new
industries such as woolen and worsted yarn, cycle tyros and tubes, paints,
varnishes and glass were established. The production capacity of the already
existing units like fertilizers, jute, paper, DDT was considerably expanded.
The reduction of export duties and the introduction of Export Bonus Scheme in 1958
increased export of the manufactured goods. There was all round development
of industries particularly in agricultural processing food products and
textiles. The share of industrial sector to GDP rose from 9.7% in 1954-55
to 11.9% in 1959-60.
3. Performance of
Industrial Sector in 1960's.
The period from 1960-1970
covers two Plan periods, the Second Five Year Plan 1960-65 and the
Third Five Year Plan 1965-70, The incentive push environments for investment,
better co-ordination and political stability led to the widening of industrial
base. The country achieved self-efficiency in essential the widening of
industrial base. There was a shift in the establishment of consumer goods
industries to heavy industries such as machine tools, petro-chemical,
electrical complex and iron and and steel etc. In short the industrial
performance in terms of growth, export and productivity increased, the share of
industrial sector to GNP went up to 11.8% from 1960 to 1965.
4. Performance of
Industrial Sector from 1970's onward.
The industrial
performance in terms of growth, exports and production was disappointing from 1971
to 1977. There were various reasons for the poor performance of the
manufacturing sector. One wing of the country (East Pakistan) was forcibly
separated. The Country had to fight a war with India in 1970. The
suspension of foreign aid, loss of indigenous market (East Pakistan), fall in
exports, devaluation to the extent of 131%, the nationalization of industries
in 1972 infected a heavy blow; labour unrest, unfavorable investment
climate, floods, recession, reduction in investment incentives etc, caused a
fall in the output of large scale industries. The annual growth rate fell to 2.8%
in the industrial sector in this period.
5. Performance of
industrial sector from July 1977 - 1997.
From July, 1977 to
1980, the Govt, initiated a large number of measures to revise the economy.
Cotton ginning rice husking and flour milling were denationalized. The private
sector was encouraged to invest in large scale industries. The investment
climate was gradually building up in the country. The annual growth rate in
manufacturing sector was 8.2% in the 1989's. The growth of large scale
manufacturing slowed down to an average of 4.7% in the first half and
further to 2.5% in the 2nd half of the 1990's. and fall further
due to lack of government interest, political instability and power battle
between two political parties.
6. Performance of
industrial sector from 1997 onward
In the year 1999-2000
the manufacturing, the share of industrial sector was 18.2% in GDP in 2003-04.
However it increased to 15.6% in GDP in the year 2004-05. The
main factors which contributed to rapid economic growth supporting were
monetary policy, financial discipline, consistency and continuity of
development policies, strengthening of domestic demand continuously improving
macro economic environment a stable rate global expansion of markets due to
liberalization of trade in 2005 etc. The overall manufacturing recorded
growth of 9.9% in 2005-06 and 8.45% in 2006-07. The
decline in the froth of manufacturing sector is due to multiple reasons like
the reduced production of cotton crops sugar shortage steel and iron problems
and global oil prices.
The industry in
Pakistan is trying to grow but is facing many problems like a lack of
government interest, frequent power outages, law & order and frequent
terrorism. As such, the environment discourages many foreign industrialists.
The locals are setting up industries but they also face problems like shortage
of raw materials, so it can be said that the time is set for industrial
revolution but all the factors are going against it.
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