RUNNING HEAD: GLOBALIZATION OF INDUSTRIAL PRODUCTS FOR THE GROWTH OF PAKISTAN

ECONOMY 1

ASSIGNMENT NO:03
SUBJECT: PAKISTAN STUDY
NAME: ABBUBAKAR SIDDIQUE

REG NO: FA18-BCV-041

SUBMITTED TO: DR.ZAHID SHAH

COMSATS UNIVERSTY ISLAMABAD

DEPARTMENT OF CIVIL ENGINEERING
ABBOTTABAD.
RUNNING HEAD: GLOBALIZATION OF INDUSTRIAL PRODUCTS FOR THE GROWTH OF PAKISTAN
ECONOMY 2

Introduction:
Agriculture sector also play an important role in the growth of economy we shouldn’t ignore
agricultural problems and try to solve them because many products of agriculture sectors are
send to industries and then export to other countries, if we see there are many problems related to
agriculture sector like Agricultural Education, Illiteracy, Various Plants Diseases, Old method of
production and etc. Let’s discuss about the challenges facing by industrial sector.

ISSUES FACED BY INDUSTRIAL SECTORS:

In 18th century the modern concept of industry-manufacturing goods began in Great Britain.
Industrial sector plays an important role in the development process of any country, Industrial
sector is the second major sector of Pakistan economy, the industrial sector is being faced and
facing many challenges let’s discuss them one by one:

INDUSTRIAL ISSUES
After the partition without the industrial sector we started our economy because there were 921
total industries in the sub-continent out of these 921 industrial units Pakistan got only 34
industrial units that are just 3.69% of total industrial share this was another issue for the
economy of Pakistan which cannot grow. If we look the ratio which we got at that time from
such ratio we are just not able to manufacture products for our own country rather than to export
it. Again economy cannot grows at such situation.

Water Issue:
Kashmir issue has been disturbing our economy since freedom people in Pakistan and especially
foreign people worried about the danger of war with India due to this issue and hesitate to invest.
Therefore if we see even the people of Pakistan investing in other country which I would like to
say is a shameful moment for us that we by ourselves has become a bag burrier for the growth of
our economy and in our country poverty increase due to this that person who is investing in other
country will not pay tax in Pakistan because he is investing out of the country which will result
in the slowdown of our economy and let this person invest in Pakistan then how many benefit
are for Pakistan for the economy of Pakistan for the people of Pakistan, people will get jobs in
industries that person will pay tax which is good for the economy and many more.

Tax Concession Another Issue:

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ECONOMY 3

It is also needed to increase the investment in new industries now let an investor invest in
industry so there will be no poverty than peoples will get jobs and will feed their children result
in no other issues will create there everyone will be happy investor as well as workers also the
farmers which will sell the crop products in a good price in short good quality and quantity of
product will be manufactured then it will become very easy for us to globalize our industrial
products which has a very good impact on the economy of our country once our economy get
strong there will be no need of going to IMF for loan and we will be become capable of giving
jobs, homes, education, and health to poor people means there will be the end of poverty and
illiteracy . The supply of raw materials is necessary for the improvement of the industrial sector,
now from where will raw material come simple if we purchase products from a farmer on proper
price then farmer will do more and more struggle and will take care of the crop in order to create
more and more amount of crop so that the quality of the product will increase day by day and our
economy will get stronger soon.

Lack of Technical Knowledge:

In early old method of production were used in all the manufacturing units therefore the quality
and quantity of production were very low it creates a bad view of our industry at world level.
Modern technology was introduced at the beginning of the 20th century. I would like to say this
is a serious issue and a burrier for the growth of economy of Pakistan now if we used modern
method of production and increase both quality and quantity so then it will become very easy for
us to globalize which will result in the growth of Pakistan economy

Education:
At the beginning of independence people have no idea how to set up the industry due to a high
degree of illiteracy. They were haven’t sufficient resources to start heavy projects, they were
unskilled and untrained due to which industrial sector cannot grown at that time and economy
faced to a critical condition another issue for economy.

Cultural Distribution:
If we look around in our country, there are various caste systems in our country results the
production in the manufacturing sector have slowed down and a shortage of raw materials has an
adverse effect on the production again industrial sector cannot grow due to these issues and we
are not able to globalize our products so that to the economy become strong.

country.

Instability;
RUNNING HEAD: GLOBALIZATION OF INDUSTRIAL PRODUCTS FOR THE GROWTH OF PAKISTAN
ECONOMY 4

Political instability is a very scary and severe problem in the modern world; it affects both
developing countries as well as developed countries. Because of political instability, the political
environment of country become uncertain and this will reduce the level of the investment,
increase inflation rate and the rate of public debt and slows down the speed of development
process and economic growth of the country. Inflation is a one of the main causes of political
instability. High rate of inflation leads the country towards uncertainty about future investments.
This leads to more conservative planning of investments, which in turn creates political unrest.
Inflations affect the political situation in many ways; it reduces the efficiency of a country by
restricting its exports. Inflation makes the exports of a country more expensive. It is also
affecting the tax system. Public debt is another cause of political instability. Public debt is that
part of the total debt, which is secured by government from internal and external sources. It has
also affected the political situation of a country and creates unrest in the economy. Heavy debt is
a challenge for a developing country. Because developing countries like Pakistan have a small
stock of capital and investment opportunities. The association between political instability and
economic progress and also the role of public debt and inflation in creating political instability
and affecting indirectly the economic achievement of a country.

Industrial Structure:
There are inequalities in industrial growth in Pakistan. Manufacturing of consumer goods is
preferred over capital goods. No doubt return on consumer goods is more but capitals goods are
necessary for economic development.

Long-term Constrain issue.

In Pakistan, agriculture is the largest part of the economy, employing 44.2% of the work force. A
large gap exists between the potential and realized yield for almost all major crops. The country
is the world's Fourth largest producer of cotton but output will drop by about 15% in 2010 owing
to Pakistan's serve flooding. An estimated 80% of cotton fields in some areas have been
damaged. Industrial growth has slowed compared to recent years owing to a fall in demand for
textiles and problems in that industry. The textile industry suffers from power shortages, reduced
availability of cotton and lack of competitiveness. The country has failed to change the structure
of output and its export. Pakistan's export share in the GDP has been stagnant for the last 25
years. For example, textiles, leather, agricultural products etc. constitute about 80% of the total
export, which are low technology and low value added products. This market is no declining,
having failed to penetrate foreign markets, given its narrow and mostly agriculture based items.
The country's textile has lost their prominent position of 1970s and currently hold about 2% of
the world market. It seems that the government has failed to take initiative of industrial
upgrading, which could have played an important role in creating jobs in expanding export
sectors. The argument in support of devaluation is that it would make export cheaper in the
RUNNING HEAD: GLOBALIZATION OF INDUSTRIAL PRODUCTS FOR THE GROWTH OF PAKISTAN
ECONOMY 5

international market and ultimately export would increase. So now government has to think in
this contest.

Weather:
If the weather is not well it causes agricultural backwardness and it results in industrial
backwardness, if we see there is inter relationship between agricultural and industrial sector so
the climate and weather condition are also a big cause of the backwardness in various industries.
If the weather is not good there will be disturbance in the production of crops which has direct
impact on the industrial sector and also on the economy so the solution to this issue is to educate
the farmers about the care of the crops and to prevent the crops from many dieses if a farmer is
aware about the protection so then there will produce a large amount of product and then can be
sold to an industry which will good for country economy investor worker and also farmers as
well as it will be very easy for us to export good quality of products on international level so
each has importance on their own place.

Industrial Credit:
There is a shortage of active financial institutions in Pakistan, which may provide credit services
to industrialists according to their needs. Terms and condition for the provision of credit are very
tight.

Corruption
It Is impossible not to taste honey or poison that one may find at the tip of one’s tongue, so it is
impossible for one dealing with government funds not to taste, at least a little bit, of the King’s
wealth . . . it is difficult, though not impossible, to stop government officials from hiding their
corrupt take.

t which in turn lowers down the returns. In Pakistan like other developing countries corruption is
increasing day by day and often encouraged rather than discouraging as the institutions,
departments and system fighting against it are weak by themselves (Ismail et. al, 2010). The
future of Pakistan and its efforts fighting against poverty are totally reliant on the successful and
fruitful completion of its developmental projects (Ahmed, 2011), and it is possible only when the
evil practice of corruption is controlled. So government should take corrective actions and
strengthen institutions and should work in collaboration with the private and civil sector to
control the uprising corruption problems. Awareness against corruption in business sphere and
general public is very much needed and implementing possible anti-corruption tools, companies
can positively contribute to the fight against corruption and Pakistan's economic and social
development.
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ECONOMY 6

Failures:
Some policy problems have persisted over decades. Excessive reliance on foreign capital, low
domestic savings, inadequate investment in the social sectors and heavy protection to domestic
industry, can all be traced back to the 1960s, otherwise considered a golden era of development.
practices. The present government in its first two years has certainly been able to reign in
corruption at the higher levels of government, has reduced government administrative spending,
and, as mentioned above, made some progress in improving the effectiveness of spending. It has,
by and large reaffirmed support for the liberal economic policies; speedy privatization and major
financial sector reform though the actual progress on privatization of public enterprises and
public owned banks remains painfully slow. But it has also made major economic policy
mistakes and has not an begun the difficult task of rebuilding public institutions for development.
New government has to find out a solution taking these problems in concentration.

Sustaining Finance:
The fiscal deficit does not include the losses and potential losses of public sector corporations
and banks. The estimated current account balance of payments deficit of $2.5 billion or 3.8
percent of GDP in 1998-99 was sustained only by extraordinary debt relief. Second, the
reduction in the fiscal and balance of payments deficit during the last two years have been
brought about mainly by reduction in the investment rate which seriously threatens the future
growth of the economy. The final and related point is because both the domestic and external
debt has risen to extraordinary heights; the bringing down of this debt burden to manageable
levels is no simple matter and will take several years of sustained and disciplined fiscal and
external resource management.

Limited Market for Capital Goods:

The narrowness of domestic and foreign markets for the industrial goods is also a major hurdle in
the way of industrial development. The small size of the market is due to low purchasing power,
low standard of goods and high cost of production etc.

Strategy
Industrial strategy implies more than just the sum of these policies. It must mean their overall
coordination, aimed at a clear set of objectives or purposes.

1. The aim of industrial strategy should be to promote structural change in the Pakistan
economy.
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ECONOMY 7

The patterns of investment and production that have developed over the last 30 years have left
the Pakistan economy with deep and longstanding weaknesses. Its objectives should be:

• raising the level of productivity in the economy as a whole, particularly in the many firms,
sectors and regions which currently lag behind those in other developed economies, thereby
enabling higher median earnings

• increasing the diversity and level of Pakistan exports, particularly in world leading sectors, and
increasing the level of import substitution, in order to improve the Pakistan’s balance of trade

• raising the rate of research and development (R&D) throughout the Pakistan economy, and
diversifying the range of firms at the technological frontier

• stimulating economic growth and productivity improvement throughout the Pakistan’s nations
and regions

• reducing the Pakistan economy’s environmental impact, particularly through its almost full
decarburization by around 2050.

To achieve these objectives industrial strategy must go well beyond correcting ‘market failures’.
It must be a more fundamental attempt to change the structure of the economy, including the
volume and direction of private and public sector investment

2. Industrial strategy should integrate the improvement of the economy’s supply side with the
stimulation of demand. Supply side policies on their own cannot address the deficient overall
demand that is currently a feature of the Pakistan economy. The Government should adopt an
‘investment-led growth strategy’, with a higher level of public sector investment, funded by
borrowing. This should be targeted at infrastructure and innovation, and aimed at ‘crowding in’
private sector investment.

CONCLUSION:
There are many issues as we discussed above in the report and now if we try to solve these issues
then we can than there will be many benefits for the economy as a result of exporting industrial
products and if we globalize it then our economy will get stronger day by day due to agricultural
as well as industrial sector because industrial sector depend upon the agricultural sector if a
farmer does hard work due to which he will go to industry and sell the agricultural products on a
proper price which is a benefit for the farmer as well as for the economy of the country,

References
Aziz-ul-Islam (1999) Globalization and development revisited in the light of Asian

experience. Asia-Pacific Development Journal 6:2.

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ECONOMY 8

Arrighi, G , Silver B ,j & Brewer B . D (2003)

Noland M., & Pack H (2003)