No economy can even dream for economic prosperity without developing its industrial sector. At the time of partition in 1947, Pakistan was inherited highly discouraging industrial assets. The newly created country commenced its industrial move in these hopeless economic and industrial circumstances. We have no doubt, developed in industrial sector like other sectors of the economy. Today, we are self-sufficient in various manufactured goods. Nevertheless, it can’t be denied also that Pakistan has not industrially developed, as it should have been during past 52 years.
During this intial period, private sector of Pakistan was lacking not only in capital but also in experience and thereby it couldn’t play its role that can be mentioned. In the light of this problem, the Government of Pakistan established PIDC1 (Pakistan Industrial Development Corporation) in 1952. This developed confidence among the industrialists and investors. After two decades, Pakistan achieved self-sufficiency in various consumer goods, but still we were lacking in key raw materials like coke, steel and iron etc. In 1973, this dream was also culminated into reality and, with the technical and financial co-operation of USSR (Now Russia), the foundation stone of Pakistan Steel Mills was laid down and today this largest project of country has been supplying steel and other allied productions.
Although the nationalization policy of Zulfiqar Ali Bhutto government2 in October 1972 shattered the confidence of investors to a great extent, the industrial policies of 1984-onwards caught hold of the sinking vessel of the economy of Pakistan. After the May 1998 post-nuclear achievements, economic sanctions weakened the recovery in this sector. Factors like economic sanctions3, side effects of the measures taken by the government to minimize the adverse effects of the sanctions (especially freezing of FCA’S), decline in domestic and foreign investment due to uncertain economic environment and lower demand for Pakistan exports caused by global economic recession4, adversely effected the growth of industrial sector.
Now the present “Un-Democratic” government has assumed power with the majority concert and showing their keen interest in economic development. They have put economic revival as their first priority, therefore we should hope for better future.
The term ‘Industry’ can be defined as:
- A collective name of all those units or organizations in an economy, which are engaged in producing material goods or rendering services of the same kind in making these organizations successful.
- Actually industry includes all those organizations, which create utility in the goods already produced by nature because the created utility indirectly satisfies the human wants. Satisfactions are directly gained by using ‘consumer goods’ while ‘capital goods’ (Machine, tools etc.) provide satisfaction directly.
- There may be various bases for classifying an industry like
Using these bases, the industries may be classified as under:
- Manufacturing industries are those, which convert natural raw materials or semi-processed items into finished products. E.g. Textile industry, which convert cotton and yarn into clothe.
- The goods, which are utilized to produce further goods, are called capital goods. E.g. Tool machines, raw materials producing industries.
- These industries produce consumer goods that are available for consumption immediately after their production. E.g. Cloth, Shoe, Soap, Medicine producing industry etc.
- These industries don’t produce goods but they get the concerned product directly from the national resources. E.g. Mining, Agriculture and Fishing industries etc.
These industries use more labour than the proportion of capital. It can also be interpreted that capital is substituted by labour. Labour intensive industries are speedily developed in those countries, which lack in capital but are thickly populated. The benefit of these industries is the lower cost of production of their products.
On contrary of labour intensive industries, these industries do the reverse. These industries are mainly present in European countries, where capital is available in abundance, but population is thin.
The future of a country can be decided on the basis of past and in the light of present. If the present of a nation is to be discussed, its past should also be considered. The answer to the question that, ‘Are we satisfied with the present industrial situation?’ is not possible without knowing the industrial past of the country. Any final comment can be given only after comparing present with the past. Some of the pessimists, with reference to the question of industrial development in Pakistan, are of opinion that no industrial development has taken place in Pakistan.
These people are those who are habitual to see the dark aspect only. Quite possible that the industrial growth and development has not been as it should have been during 52 years. To decide upon whether industrial development has been satisfactory, we will have to consider the industrial structure that came to the lot of Pakistan in 1947. At the time of its emergence, only 34 small industrial units came to the lot of Pakistan with 26400 workers. In 1949-50, the industrial share to the total GNP of Pakistan was only 7%.
After 1947, the areas, which fell in Pakistan, were merely raw material producing areas, which were providing the raw materials to those areas, which kept intact with India after the partition. East Pakistan (Now Bangladesh) was supplying jute to the factories of West Bengal because of having not a single jute mill. Punjab and Sindh were catering the needs for cotton for the textile mills of Ahmadabad, Banaras and Baroda.
This in even distribution and development of industries even prior to the division of sub-continent took place because British rulers were having soft corner for Hindus and ill feelings for Muslims. They wanted to keep Muslims socially and economically under the domination of Hindus.
After creation of Pakistan, when industrial assets were divided, Pakistan received the industrial units included cotton jinning, sugar, ice and rice husking units. The people were not industrial minded therefore, there was no supply of managerial peoples and entrepreneurs. In the undivided India, the owners of these units were Hindus, so after partition when they left for India, these units were either closed or merged. Consequently Industrial vacuum was created in Pakistan. Briefly, we can say that there was no industrial base in Pakistan in 1947.