RUNNING HEAD: CURRENT,SOCIAL,ECONOMICAL AND POLITICAL ISSUES FACED BY INDUSTRIAL SECTOR

OF PAKISTAN 1

Industrialization

What is 'Industrialization':-
Industrialization is the process by which an economy is transformed
from primarily agricultural to one based on the manufacturing of goods. Individual manual labor
is often replaced by mechanize mass production and craftsmen are replaced by assembly lines
Characteristics of industrialization include economic growth, more efficient division of labor,
and the use of technological innovation to solve problems as opposed to dependency on
conditions outside human control.

INDUSTRIES IN PAKISTAN

Pakistan's industrial sector accounts for about 24% of GDP. Cotton textile production and
apparel manufacturing are Pakistan's largest industries, accounting for about 66% of the
merchandise exports and almost 40% of the employed labor force. Cotton and cotton-based
products account for 61% of export earnings of Pakistan. The consumption of cotton increased
by 5.7% over the past five years while the economic growth rate was 7%. By 2010 the spinning
capacity increased to 15 million spindles and textile exports hit $15.5 billion. Other major
industries include cement, fertilizer, edible oil, sugar, steel, tobacco, chemicals, machinery and
food processing.
The government is privatization large-scale parastatal units, and the public sector accounts for a
shrinking proportion of industrial output, while growth in overall industrial output (including the
private sector) has accelerated. Government policies aim to diversify the country's industrial base
and bolster and export industries .
Information technology in pakistanis a growing and rising, which has the potential to expand
even more in the future. Matters relating to the IT industry are overseen and regulated by
the Ministry of information and Broadcasting of the Government of Pakistan . The IT industry
is regarded as a successful sector of Pakistan economically, even during financial crisis.. The
first IT policy and implementation strategy was approved under the leadership of of prof Atta-ur-
Rahman FRS , then Federal Minister of Science & Technology, in August 2000 which laid the
foundations of the development of this sector. In 2001, a 15 year tax holiday was approved to
promote the IT industry which has the grown from $ 30 million to over $ 3 billion during the last
16 years. A nationwide programme to train teachers was initiated by Intel in March 2002 in
Pakistan on the request of Prof. Atta-ur-Rahman which has resulted in the training of 220,000
teachers across 70 districts at no cost to the government. The government of Pakistan has given
incentives to IT investors in the country during the last decade, this resulted in the development
of the IT sector. From 2003 to 2005, the country's IT exports saw a rise of about fifty percent and
amounted a total of about 48.5 million USD. The World Economic Forum, assessing the
development of Information and Communication Technology in the country ranked Pakistan
111th among 144 countries in the Global Information Technology report of 2014.
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As of 2011, Pakistan has over 20 million internet users and is ranked as one of the top countries
that have registered a high growth rate in internet penetration. Overall, it has the 27th largest
population of internet users in the world. In the fiscal year 2012-2013, the Government of
Pakistan aims to spend Rs. 4.6 billion on information technology projects, with emphasis on e-
government, human resource and infrastructure development .

TYPES OF INDUSTRIES IN PAKISTAN :

There are many types of industries working in

Pakistan some of them are given below:

MINING AND QUARRYING

The country has immense reserves of various minerals and natural resources. Important minerals
found in Pakistan are gypsum, limestone, chromites, iron ore, rock salt, silver, gold, precious
stones, gems, marble, copper, coal, graphite, sulphur, fire clay, silica. The salt range in Punjab
Province has the largest deposit of pure salt found anywhere in the world. Balochistan province
is a mineral-rich area having substantial mineral, oil and gas reserves which have not been
exploited to their full capacity or fully explored, recent government policies have begun to
develop this region of the country and to tap into the immense resources found there. The
province has significant quantities of copper, chromite and iron, and pockets of antimony and
zinc in the south and gold in the far west. Natural gas was discovered near Sui in 1952, and the
province has been gradually developing its oil and gas projects over the past fifty years.[2]

Major reserves of copper and gold in Balochistan's RekoDiq area have been discovered in early
2006. The RekoDiq mining area has proven estimated reserves of 2 billion tons of copper and 20
million ounces of gold. According to the current market price, the value of the deposits has been
estimated at about $65 billion, which would generate thousands of jobs.
The discovery has ranked Rekodiq among the world's top seven copper reserves. The Rekodiq
project is estimated to produce 200,000 tons of copper and 400,000 ounces of gold per year, at an
estimated value of $1.25 billion at current market prices. The copper and gold are currently
traded at about $5,000 per ton and $600 per ounce respectively in the international
market.[3] Khyber Pakhtunkhwa Province accounts for at least 78% of the marble production in
Pakistan. Pakistan is home to some of the most finest and purest grades of marble, granite and
slate found in the world. Much of the grades A Marble that is exported out of European countries
like Italy actually have their origins in Pakistan which previously lacked fine polishing and
processing machinery. The Government has taken steps to invest in this crucial sector with the
recent establishment of a Marble City within Balochistan. [1]
The Federal Bureau of Statistics provisionally valued this sector at Rs.211,851 million in 2005
thus registering over 99% growth since 2000.

[1] https://en.wikipedia.org/wiki/Industry_of_Pakistan#cite_note-worldbank.org-1
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[2] https://en.wikipedia.org/wiki/Industry_of_Pakistan#cite_note-minerals-2

[3] https://en.wikipedia.org/wiki/Industry_of_Pakistan#cite_note-3

FUEL EXTRACTION INDUSTRIES

pakistan's first oil field was discovered in the late 1952 in Balochistan near a giant gas field at
suo Sui in Balochistan. The Toot oilfield was discovered in the early 1960s Islamabad in the
Punjab. Production has steadily increased since then.
Pakistan's first gas field was the giant gas field at Sui in Balochistan which was discovered in the
late 1952. Pakistan is also a major producer of Bituminous coal, Sub-bituminous coal and
Lignite. Coal mining started in the British colonial era and has continued to be used by Pakistani
industries after independence in 1947.

MANUFACTURING

In FY 2002-03, real growth in manufacturing was 7.7%. In the twelve months ending 30 June
2004, large-scale manufacturing grew by more than 18% compared to the previous twelve-month
period. The textile and garment industry's share in the economy along with its contribution to
exports, employment, foreign-exchange earnings, investment and value added make it Pakistan's
single largest manufacturing sector. The industry comprises 453 textile mills: 50 integrated units;
and 403 spinning units, with 9.33 million spindles and 148,000 rotors, The capacity utilization
was 83% for spindles and 47% for rotors during 2003.
The Federal Bureau of Statistics provisionally valued large-scale manufacturing at Rs.981,518
million in 2005 thus registering over 138% growth since 2000 while small-scale manufacturing
was valued at Rs.356,835 million in 2005 thus registering over 80% growth since 2000.

AUTOMATIVE INDUSTRIES

Pakistan,s automotive industriy the one of the fastest growing industries of the country,
accounting for 4% of Pakistan's GDP and employing a workforce of over 1,800,000
people.Currently there are 3200 automotive manufacturing plants in the country, with an
investment of ₨92 billion (US$870 million) producing 1.8 million motorcycles and 200,000
vehicles annually. Its contribution to the national exchequer is nearly ₨50
billion (US$470 million). The sector, as a whole, provides employment to 3.5 million people and
plays a pivotal role in promoting the growth of the vendor industry. Pakistan’s auto market is
considered among the smallest, but fastest growing in South Asia. Over 180,000 cars were sold
in the fiscal year 2014-15, rising to 206,777 units fiscal year 2015-16.
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Pakistan steel mills corporation is a producer of long rolled steel and heavy metal products and
entities in the country. Headquartered in Karachi, Sindh Province of Pakistan, the PSM is the
current largest industrial mega-corporation, having a production capacity of 1.1—5.0 million
tonnes of steel and iron foundries. Built with the contributions of the Soviet Union in the 1970s,
it is the largest industrial mega-corporation complex, vastly expanded in an enormous
dimensions construction inputs, involving the use of 1.29Mn cubic meters of concrete and
5.70Mn cubic meters of earth work, and containing ~330,000 tonnes of heavy machinery, steel
structures and electrical equipment.
A controversial attempt was made to privatize the steel mills to global private ownership under a
counter-measure Privatization Programme of Prime minister Shaukat Aziz. All attempts were
thwarted by the Supreme Court which launched a full-fledged investigation against the attempts
to privatize as private sector and lost the control of the steel mills in a matter of weeks. In spite
of its enormous size and expansion, only 18% of the capacity was in use and the steel mills
requested a bailout plan of Rs.12 billion to prevent its closure; the bailout plan was dismissed by
the government. Finally, the steel mills was brought back to government-ownership management
under an inverse counter-measure Nationalization Programme of Prime
Minister YousafRazaGillani. Since then, its operational plant capacity has reached 30%—50%
after seeking the government financial assistance.

CHALLENGES OF INDUSTRIES IN PAKISTAN

Early years (1950–1969)

In 1961, Allwin Engineering introduced precision auto parts to the Pakistani auto market. In
1962, Lambretta partnered with Wazir Ali Engineering to begin production of the Lambretta
TV200 scooter while Kandawala Industries introduced the CJ 5, CJ 6, CJ 7 series Jeep. In
1963, General Tyre Pakistan began production in Karachi while HyeSonsbegan production
of Mack Trucks. In 1964, Rana Tractors began producing Massey Ferguson Tractors while the
famous Vespa scooter and rickshaw were introduced by Raja Auto Cars. In 1965, Jaffer
Industries and Mannoo Motors began operations

Deregulation (1990–2009)

The industry was highly regulated until the early 1990s. Following deregulation, the decade
witnessed a huge boom in auto production, as nationalization was abandoned in favor of
privatization. Japan acquired the 40% shares of Pak Suzuki in 1991. In 1993, the Indus Motors
Company began production of Toyota Corollas. In 1994, the Pakistan Automotive Manufacturers
Association formed, and Honda Atlas introduced manufacturing of the Honda Civic. In 1995, the
Engineering Development Board inaugurated the PAP show.
From 2002 to 2007, Small Assemblers and many Bike importers started assembling of Replica
CD70CC with Chinese collebration, in the year annual production of bikes reached its higher
level auto sales reached record sales year after year, reaching a peak of 195,688 sales in 2007,
during this period Afzal Motors began local assembly of Daewoo buses and trucks under license
from Daewoo Bus, South Korea and Tata Daewoo, thanks to rising car financing up to 70-80%
by banks and low interest rates coupled with rising rural purchases. From 2007 to 2009, the auto
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sector witnessed reduce sales amid high interest rates and Yen appreciation against the Rupee. In
2007, the automotive industry made up 2.8% of Pakistan's GDP and contributed 16% to the
manufacturing sector. The 2000s also saw the introduction of dual fuel options to run both on
Petrol and CNG, which is more affordable and cheaper than petrol in the country.

Rapid growth (2010–present)

In 2010 the sales rebounded and began increasing again. The auto industry predicted a growing
demand in Pakistan and invested over ₨ 20 billion (US$190 million) during this decade.
Motorcycle production hit a record level in 2016-17, with 2.5 million units made. In 2015, the
Auto Policy 2016-21 was introduced, to help lure new automakers, which has traditionally been
dominated by Honda, Toyota and Suzuki. The auto industry remains the second largest payer of
indirect taxes after the petroleum industry in Pakistan. At present, there are 10 cars for every
1000 people in Pakistan. This is one of the lowest ratios among emerging economies, which
itself speaks of high potential of growth. Rising per capita income with changing demographic
workforce in the next decade will provide a stimulus to the industry to expand and
grow Toyota started local assembly of its sedan Camery similarly United motors started first
pakistanilacally made car GhandharaNissanstarted production of Isuzu d-max in pakistan.

CONCLUSION:
For the strong economy of Pakistan we must have to develop our economy nationally as well as
internationally because industrial sector play vital role in the development of a country. We must
develop our industrial sector in villages. In villages if we develop small industries it will change
the lives of people living there. The poverty level will decrease and the economy of the our
country will be promoted. On small industries the investments are reasonable and a common
man can afford easily. On the other side we must have to promote our industrial zones on
national level so the export rate of our country will rise. So the need of the day is to promote the
industries of our country for the prosperity of this country.
Recommendations:
• Policies must be strictly implemented.
• Industrialists be given loans on easy installments, so as they could run industries smoothly.
• New markets for the local products be explored and the quality of local products be improved
to increase the demand abroad.
• Means of communication and basic infrastructure required for industry like roads,
transportation etc. be improved and enhanced to make the access easy.
• Law and order situation be improved to allure the investors to invest their money and time.
• More attentions should be given to increase export.