Though the industrial sector has started making its
presence felt by contributing towards the overall economic growth of
Pakistan, yet it stands no where when compared to the growth rate
achieved by the economies elsewhere in the region.
In Pakistan, the share of manufacturing in GDP has
risen by about 30 percent since 1968 while this sector has contributed
over 280 percent growth in case of Malaysia, 170 percent in Thailand
and 120 percent in Korea.
It is significant to note that South East Asian
countries which used to depend largely upon production and export of
primary products in past, have dramatically shifted their production
structure and export basket in favor of manufacturing and
Bangladesh for example has authored the success
story for such transformation. From its earlier dependence on jute and
jute products it has successfully moved on to garments and knitwear
which now accounts for more than 60 percent of its exports.
In case of Pakistan, however, primary products and
exports based on particularly cotton and its value-added products
continue to have a dominant share owing to lack of diversification in
exports surplus. Engineering and other industrial products have a
little share in the exports regime of the country. This neglected
area, however, was taken into notice by the present government which
has realized the importance of the significance of the engineering
industry to provide a sound footing to the national economy. Musharraf
government came out in 2002 with an ambitious "10 years
engineering vision" envisaging 10 to 12 billion dollar investment
plan to increase the role of industrial products and manufacturing
sector by 25-30 percent respectively in GDP.
The engineering vision plan evolved by the Ministry
of Industry and Industrial Development Board under the supervision of
the then Minister for Industries Razzaq Dawood, aims to develop
engineering industry to produce export surplus in industrial products
and manufactured goods worth over $5/6 billion by 2010 from 270
million dollar at present against a world market of $ 6 trillion.
In the past deficit financing, adverse balance of
payment situation and inflation have been the key factors at the macro
level that are responsible for the economic disaster in Pakistan. At
the micro level it is attaching low priority to the development of the
engineering industry and the adoption of negative attitude towards a
Research and Development (R&D) based policy and promote the
transfer of technology and development of an indigenous industrial
base that have not provided any chance of self-reliance. The net
result has been the primary manufacturers, low value addition and low
level of technology.
With the advent of WTO, the economies are getting
integrated and fast creating a situation where the fittest shall
survive. In view of the above facts, the current cut-throat
competition calls for a long run objective to enable the industry to
face the challenges, which may require simultaneous implementation in
the following three areas:
Leveraging Existing Industrial Strengths.
(b) Creating a strong
intermediate sector and Domestic Linkages (c)
Creating External Linkages through FDI.
In line with its long-term planning, the present
government decided in 2000 to chalk out a ten-year "Engineering
Vision 2010" to achieve the desired results which include the
cliche of "Asian Tiger" in the foreseeable future.
This long-term vision was based on export led
industrial growth to add $ 5 to 6 billion exports of engineering goods
through diversification and optimizing available resources and
non-resource based industries. The emphasis was to be on full
integration of manufacturing operations through value-addition to
enhance industrial linkages and to increase productivity and
competitiveness by (1)
Global Orientation; (2)
Public/Private Sector Industry; (3)
Productivity Enhancement and Quality/Standard; (4)
Industrial Database and (5)
Balanced Regional Industrialization.
There was a hope that the engineering vision and
the defense products export organization set up by the government
would help boost exports by over 25 percent during fiscal year 2002-03
around 50 percent by 2004-05. The government had advised the
entrepreneurs, engaged in the engineering industry, to make concerted
efforts to penetrate into the potential markets of Malaysia and
Thailand, which had a demand of $30 billion engineering goods. However
a little has been achieved in terms of the objective of the vision so
The development of engineering industry is
generally characterized with an all out government support. In
Pakistan, this support is not visible if not absent. Consequently, our
engineering industry remains far from its true potential in the face
of rising imports of capital goods. Pakistan continues to be a single
crop economy i.e. cotton which offers limited opportunities for
expansion and growth in future.
It is essentially required that our reliance is
shifted to other high value-added areas like engineering goods
industry, we night miss the bus in the 21st century world of science
and technology, otherwise!