Key Issue in Pakistan Industry
By: regina • Essay • 786 Words • June 13, 2010 • 2,175 Views
Key Issue in Pakistan Industry
Key Issues in Industry in Pakistan
The previous two chapters have given a chronological account
of developments in the industrial sector in Pakistan, showing
how perspectives of different regimes have influenced
industrial and economic growth. This chapter looks at
contemporary issues in the industrial sector, including
privatization, the textile sector and a host of others. Many
of the issues in the industrial sector today have their roots
in policies adopted many years ago; so much so, that some
analysts and experts blame the problems of today on key
decisions of yesteryear.
8.1 Numbers and Trends in
Industry
The phenomenal growth rate experienced in the industrial
sector in Pakistan in the early 1950s took place, from an
almost non-existent base, where the growth rate of the
industrial sector was doubling itself every few years. The
extraordinary growth rates of over 20 per cent between
1950 and 1955 in large-scale manufacturing were achieved
primarily because very little existed to start with and, hence,
any investment and production, no matter how little, would
register impressive gains. Only in the early 1960s did largescale
manufacturing come close to the extraordinary period of
the early and mid-1950s. Nevertheless, overall manufacturing
did manage to produce a growth rate of close to 10 per cent
on average throughout the 1960s (Table 8.1), followed by
a substantial reduction in the 1970s, the reasons for which
were discussed in the previous chapters. The 1980s once again
saw a return to a very impressive annual average growth
in manufacturing of 8.21 per cent, a fact which received
much recognition by international agencies and independent
analysts and scholars (see Chapter 7).
A trend which is striking for its monotony is that exhibited
by the small-scale sector. The first few years, 1950 to 1962,
show a consistent trend of 2.3 per cent annual growth,
followed by a growth rate of 2.9 per cent over the next eight
years, with the Bhutto period registering an annual growth
rate of 7.3 per cent. From 1977 until recently, we witness a
consistent trend of 8.4 per cent; from the 1990s this trend
rate falls to another consistent 5.3 per cent. This trend seems
too consistent for it to be of any real substance. In fact, the
growth rate for the small-scale sector is not calculated, as it is
for the large-scale sector, and is merely imputed or assumed.
Every few years, a readjustment in the annual growth rate is
made to reflect a more realistic trend. However, as discussed
in section 8.2 the small-scale and informal sector is much
more dynamic and productive than the government's figures
show. Moreover, this estimate for the small-scale industrial
sector implies that, because the estimate is on the low side,
so too would be the figure for overall manufacturing, which
is based on both large- and small-scale industry. Furthermore,
we argue in the next section that not only is the smallscale
sector more dynamic on its own, but many activities
previously