Presented to:

mr.fazal ur
rehman

Presented by:
raja fakhar ali

raja ghufran
ghazan khan

arslan haider
 CHAPTER # 11

INDUSTRY AND ECONOMIC DEVELOPMENT

In This Chapter :: We Discuss
IMPORTANCE OF INDUSTRIAL
DEVELOPMENT
Industrialization is the only key for economic
development. The historical facts revealed that
all the developed countries of the world achieved
the goal of economic development through rapid
industrialization. Pakistan also needs
industrialization to achieve higher standard of
living for its people. The importance of
industrial development can be realized from the
following advantages:
Ø
v INCREASE IN NATIONAL INCOME.
v
v EMPLOYMENT OPPORTUNITIES .
v
v HIGH LIVING STANDARD .
v
v RISE IN AGRICULTURAL PRODUCTION.
 v BALANCE OF PAYMENTS.
v
v ECONOMIC STABILITY.
v
v PROGRESS IN OTHER SECTORS.
v
v SPECIALIZATION AND SKILLS.
v
v EASY TO CONTROL.
v
v TECHNOLOGICAL PROGRESS.
v
v INCREASING IN SAVING AND INVESTMENT.
v
v PROVISION OF DEFENCE.
v
v GOVERNMENT REVENUE.
Ø
 HISTORY OF INDUSTRIAL
GROWTH IN PAKISTAN.

Ø
ØGROWTH OF INDUSTRIES UP TO 1950
Ø
ØIndustrialization in 1950s
Ø
ØIndustrialization in 1960s
Ø
ØIndustrial development in 1970 to 1977
Ø
ØIndustrial development 1977 – 2008
 GROWTH OF INDUSTRIES UP TO 1950
Ø
ØAt the time of independence, there were 921
large scale industries producing cotton, textile,
jute, sugar, cement, glass, cigarettes, chemical
goods, steel and iron products.
Ø
ØThere were 11 lac people working in these
industries.
Ø
ØThe government of Pakistan called a conference
in December 1947 to make guidelines for the
establishment of industries in the countries.
Ø
Industrialization in 1950s
Ø
ØThe initial experience revealed that private
sector industries were interested only in high
profit-earning light industries.
Ø
ØGovernment of Pakistan set up the “Pakistan
Industrial Development Corporation”
Ø
ØThe PIDC made investment in 59 industrial units
by June 1971.Its major investment was in cement,
fertilizer, jute and paper industries.
Ø
 Industrialization in 1960’s
Ø
ØIn the second five year plan, 1960-65, a sum of
RS. 513 crore was allocated for the growth of
industrial sector.

ØDuring this period, the incentives for investment,

credit facilities provided by PIDC.
Ø
 Industrial development in 1970
to 1977
Ø
Ø The development in the industrial sector
during 1971 to 1977 was disappointing.
Ø
Ø The various reasons for poor
development were war with India.
Ø
Ø Separation of east Pakistan, suspension
of foreign aid, loss of indigenous
market, fall in export, devaluation,
labor and political unrest
 Industrial development 1977 –
2008
Ø After the end of Bhutto regime the new
government took many steps for the
growth of industrial sector.
Ø
Ø The flour milling, rice husking and cotton
ginning factories were denationalized.
It was declared that no further
nationalization of private industries
will be done.
Ø
 Causes of industrial
backwardness in Pakistan
There are a large number of causes for industrial


backwardness in Pakistan.



These causes can be divided as follows:
v
v Historical Causes
v Economic Causes
v Political Causes
v Social and Geographical Causes
•
 Historical Causes
• Industrial revolution introduced Power looms for
textile production.
• The Hand loom industry was very slow and
produced an inferior quality textile.
• British collected raw material for their industries
from the sub-continent and they captured the
market of their products.
• The areas with Muslim majority were kept
backward deliberately to favor the Hindus.
• The few industries which were set up India were
located at the coastal cities of Calcutta,
madras and Bombay which were far from
Pakistan’s territories.
Ø
 ECONOMIC Causes:

 Lack of Capital
 Lack of Infrastructure
 Load shedding of Electricity
 Lack of foreign exchange
 Size of the market
 Industrial Consultancy
 Industrial development Strategies
•
Political causes:

 Unstable Political system
 Kashmir Issue
 Burden of Refugees
 Wars with India
 Racial and Ethnic Disturbances
 Fear of Nationalization
•
Social and Geographical Causes


Ø
Ø Lack of Education
Ø
Ø Labour problems


Ø Faith and Fate

Ø
Ø Greediness and Fashion


Ø Climate and weather

Ø
 IMPACT OF NATIONALIZATION
Ø
Ø Nationalization of basic industries discouraged
private investment in large scale industries.
Ø
Ø Fear for further and absence of a consistent policy
towards the private sector had created an
unfavorable climate for private investment.
Ø
Ø The nationalized industries were not compensated
fairly.
Ø
Ø The 22 big industrialist families were bitterly
criticized.
Ø Due to uncertain political situation and industries
policies, foreign investors were reluctant to
invest in Pakistan.
Ø
Ø The cost of machine and plants were rising very
fast due to inflation and devaluation of the
currency.
Ø
Ø A high wage rate due to increasing demand for
Labour, political unrest, the Afghanistan issue
and sabotage activities of terrorist resulted in low
investment level in the private sector.
Ø
Ø Kidnapping activities in Karachi and other industrial
cities discourage private investors from showing
their wealth.
Ø
Ø
 Performance of public sector
enterprises
Ø
Ø Pakistan industrial development corporation
(PIDC).
Ø
Ø Federal chemical and ceramic corporation limited
(FCCCL).
Ø
Ø Pakistan steel mills corporation (PASMIC)
Ø
Ø National fertilizer corporation (NFC)
Ø
Ø Pakistan automobile corporation (PAC)
Ø

•
• State engineering corporation (SEC).


• State petroleum refunding and petro

chemical corporation(PERAC).
•
• State cement corporation of Pakistan
(SCCP).
•
 YO U
ANK
TH