COUNTRY'S INDUSTRIAL SECTOR STRUGGLING TO COMPETE IN THE GLOBALISED COMPETITIVE ENVIRONMENT

KANWAL SALEEM
Aug 18 - 24, 2008

Pakistan celebrated its 61st anniversary on 14th August, 2008. Dictatorship ruled the country for 33 years during which industry could not grow at its full strength. However, despite making significant progress since independence, the country's industrial sector is still struggling to compete in the globalised competitive environment.

Poverty, unemployment, hunger, repression, injustice, extremism and the exploitation are still the realities faced by the masses after 61 years of independence. Vast majority of the population is still living without proper healthcare, education, sanitation, clean drinking water, housing and transport facilities. Feelings of disappointment and desperation are high while the whole history of Pakistan is full of crises, wars, military interventions, social and political disturbances. The colonial state structure and strong establishment created a number of problems for the country.

Pakistan inherited very weak rather non-functional industrial units. The country had a small basic chemical industry in 1947. By the middle of 1955, there were 4 units for the production of sulphuoric acid considered to be an index of industrial activity. One unit at Lyallpur used its output within its plant for further processing. About 3300 tons were available to the market from three plants at Karachi, Sukkur and Rawalpindi.

The sugar sector was also in shambles while textile sector was in poor state of affairs. With the passage of time textile, cement and sugar industry achieved marvelous progress and a large number of units were established across the country.

A spokesman of Pakistan Sugar Mills Association (PSMA) told PAGE Pakistan is the 5th largest country in the world in terms of area under sugar cane cultivation, 11th by production and 60th in yield. He said that sugarcane is the primary raw material for the production of sugar. Since independence, the area under cultivation has increased more rapidly than any other major crop. It is one of the major crops in Pakistan cultivated over an area of around one million hectares.

He stated that the sugar industry in Pakistan is the 2nd largest agro based industry comprising around 81 sugar mills with annual crushing capacity of over 6.1 million tones. Sugarcane farming and sugar manufacturing contribute significantly to the national exchequer in the form of various taxes and levies. Sugar manufacturing and its by-products have contributed significantly towards the foreign exchange resources through import substitution, he added.

He further said that sugar industry is mostly located in the rural areas of Punjab and Sindh. A small percentage of total production is produced in the NWFP province. Previously, Punjab was partly dependent on supply of sugar from Sindh, but lately the establishment of some large-scale units in Punjab has made the province self-sufficient in the commodity. Sindh still has surplus production. At present, the installed capacity for sugar production is above 5.5 million tonnes, whereas the demand is estimated around 3 million tonnes. The large-scale capacity was added in the nineties and was the outcome of entry of politicians in sugar industry-both in Punjab and Sindh. Since this expansion was mainly financed by state-owned financial institutions, often the basic criteria for extending credit-economic viability were ignored.

During the last few years, telecom sector achieved tremendous growth and progress.

Telecom sector had witnessed phenomenal growth in Pakistan owing to the business friendly policies of the government, which seems committed to the development of telecom sector and to provide a level playing field to all major players in this sector.

Experts told PAGE that regulatory regime in the telecom sector was not meant to hamper growth of this vital sector, rather it intended to check misuse and abuse of mobile phone facility particularly with regard to terrorist activities.

They said that the telecom sector is not only providing efficient service to the bulk of the population but also generating employment opportunities for the people. Further, they said that Pakistan is situated in a region where security environment is unfortunately not so ideal and the country has been bearing the brunt of the global war on terror.

They said the market forces usually determine rules of competition globally and Pakistan is no exception.

At present, they said the PTA is planning to launch 3G by end of this year; hence all telecom providers should educate their customers regarding new technologies so that they can understand and utilize new value added services.

They were of the view that due to government policies a friendly environment exists for foreign investors in telecom sector and that is why other countries are investing in this sector without any fear.

Only three years back, the vision about broadband was given and now the number of broadband customer is increasing day by day, they added.

They further said that mobile sector is expanding day by day due to good infrastructure and has witnessed a 100-percent increase during last three to four year. Moreover, the customer base has increased by 27 million and now number of Mobile Customer gone up to 87 million. The telecom sector alone paid Rs. 100 billion revenue to the national exchequer whereas this year the same amount has been paid in seven months.

Moreover, the country's cement sector had also achieved marvelous progress since independence. At present, cement sector is one of the strong sectors making further progress.

At present high prices of cement is matter of concern for the consumers. The government wants to ensure the availability of cement at affordable rates in domestic market so that construction activities are not hampered.

A spokesman of the All Pakistan Cement Manufacturers Association said that increase in prices of coal, furnace oil and packing material in international market has caused an increase in input cost. He said that cement was available in sufficient quantity and there was no shortage of cement in the country.