Pak Studies 3 assig - “Current Social, Economic, legal and Political Challenges related to Industrial PDF

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Topic: Current Industrial problems/challenges and solutions for PakistanIntroduction:Definition: Industry refers to that sector of economy which is related with manufacturing and production of different products”.Industrial sector plays a very vital role in the economic development of underdeveloped...

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Topic: Current Industrial problems/challenges and solutions for Pakistan

Introduction: Definition: Industry refers to that sector of economy which is related with manufacturing and production of different products”. Industrial sector plays a very vital role in the economic development of underdeveloped countries. Industries are categorize into two terms:  

In Economics Terms: The organized economic activity concerned with manufacture, extraction and processing of raw materials, or construction. In Business / Commerce Terms: A branch of commercial enterprise concerned with the output of a specified product or service the steel industry.

The few main features of the industries:    

Secondary Sector of Economy Man-made Sector Converts raw material into Value Added Products Manufacturing is a Capital Intensive Sector.

Industries support all countries to improve their economies, both emerging and developed countries. Industries has different functions some of them are discussed below:  Industrial Sector is of great importance for economic development of country.  Industrial Sector is of great importance for economic development of country. It is historical fact that countries with strong industrial sector have showed more economic growth and development industrial sector have shown improvement in national income and promoted living standard of population. Categories of the Industries: One can categorize the industry into several units/parts but mainly it is categorized into four main divisions that are as follows.    

Manufacturing Mining & Quarrying Construction Electricity & Gas Distribution

Some manufacturing industries are: 1. 2. 3. 4.

Textile & Apparel Food, Beverage & Tobacco Petroleum Group Pharmaceutical

5. 6. 7. 8.

Non-Metallic Minerals Products Automobile Steel Products Fertilizers

Some of the mining and quarrying industries are: 1. 2. 3. 4. 5. 6. 7.

Coal Natural Gas Crude Oil Chromite Dolomite Gypsum Lime Stone

Some of the Construction Industries are: 1. Heavy Engineering/Infrastructure Construction 2. Commercial Building Construction 3. Industrial Construction Some of the Electricity & Gas Distribution Industries are; 1. Electricity 2. CNG

Findings and Discussion

Main causes of the failure of the industries are:

Causes:        

Lack of Capital Energy Crisis Size of Market Lack of Credit Facilities Modern Technology Lack of Industrial Research Inadequate Transport Facilities Shortage of Specialists

The detail discussion of each of the causes of the failure of the industries are given below. 1: Lack of Capital: Lack of capital is a major hurdle in the way of industrialization of heavy industries in Pakistan. The amount of capital required in industries like chemical, automobile, iron, steel, textile, sugar,

paper board and paper, is huge, Pakistan Industrial Development Corporation (PIDC) And Pakistan Industrial And Credit Corporation (PICIC) part of the required capital. Sufficient amount of capital is not available for investment from domestic sources. 2: Energy Crisis: Load shedding has resulted in frequent breakdowns of electricity in the country. This is obstructing the industrial production and thus the expansion of industries is not taking place. Moreover, there has not been any long term energy policy in the country due to economic and political instability. The short term measures therefore have not led to the expansion of industries in Pakistan. 3: Size of Market: The size of market in Pakistan is very small; therefore, it is an obstacle in the expansion and growth of industrial sector. Poverty of the people, supply of bad quality product, limited demand for goods, market, transport, and communication facilities, high production costs etc. are the major factors which limit the extent of market. Unless multinational enterprises are invited to make investment in export oriented and import substitution industries, the size of market for industrial goods cannot be extended. 4: Lack of Credit Facilities: Prior to nationalization of banks, the banks were in the hands of few families who were also holding large scale industries. Major share of loans was going in these hands; they were receiving loans at lower rate of interest. These loans were frequently used for unproductive purposes while small businessmen and qualified entrepreneurs could not enjoy credit facility although after nationalization there was a change in this behavior yet credit facilities were being provided on political basis for the last 20 years. 5: Modern Technology: In the modern time a country without modern technology cannot develop industrially. The basic secret of industrially developed countries at present is the modern technology. J Especially Japan at present is on top of the list of industrially developed countries because of technology but in Pakistan the literacy rate is low. 6: Lack of Industrial Research: Lack of industrial research is also a problem which is responsible for high production cost. Industrial research discovers new technique of production and introduces new varieties of product. Due to lack of industrial research, improvement in the production technique has not been made possible and as such production cost continues to be high. 7: Inadequate Transport Facilities: Swift and developed means of transport are necessary for lab our mobility and for raw materials from production areas to factories and to supply finished products from factories to markets. But means of transport and communications are not developed. Due industrialists are not properly

aware of the market situation. Fast information technology is now solving this problem for the educated industrialists. 8: Shortage of Specialists: Industrial sector requires specialized staff e.g. qualified organizers, engineers, mechanics, accountants, marketing managers marketing surveyors, sale and purchase managers, but they are short in Pakistan. Due to lack of facilities and financial hardships, they prefer to work in developed countries. Skilled workers and professionals are needed badly to get rid of industrial slow down.

Solution: As we have discussed earlier that there are number of causes that lead to the failure of the industrial sector. As we know that when our industries goes to the failure that tend to lead in the downfall of the economy of the country. As a result the GDP of the Pakistan become less and less causing failure in number of terms as discussed earlier. So to overcome and stop this failure the industrial sector as well as the government of Pakistan has taken the steps to overcome it and take the industrial sector up to the sky so I could help the country to boost up the economy, some of the solution are given below:         

Foreign investment Attract foreign cargo airlines Micro credit Substitute of powers (oil, gas, wind mills Decrease interest rate Privatization Innovative technology Training of labor Research development

The industrial sector should follow these steps as shown below:         

Advanced infrastructure is necessary for industrial development of Pakistan. Financial institutions should provide credit facilities to industrial sector at flexible terms and conditions. There should be expansion of markets, at domestic and foreign level, of industrial goods. Foreign investment should be encouraged; more incentives should be given to investors. Political stability is compulsory for the development of industrial sector. High degree of technical education is required to produce skilled, technical and efficient work force. Problem of load-shedding and irregular supply of electricity should be removed. Commercial policy and self-reliance policy should be adopted to remove industrial backwardness. Foreign exchange reserves and the balance of payment position should be favorable to develop industrial sector.

For the betterment of the country and to increase the GDP of the industry government of Pakistan has made several organization to fight for this situation and help in the betterment of the industrial sector, some of the organization are and steps taken by government are as follows,          

Pakistan Industrial Development Corporation (P.I.D.C) Industrial Development Bank of Pakistan (I.D.B.P) Pakistan Industrial Credit and Investment Corporation Industrial Research and Training Protectionist Policy Tax Concession Encouragement to Private Enterprises Export Processing Zone Attracting Foreign Capital National Development Corporation Finance

Conclusion and Recommendation: In the end, it is concluded that government of Pakistan should take measures to overcome the bad and failure situation of the industrial sectors. Several action are taken by the organization and the government as discussed earlier. The best recommendation is that government should do the Privatization of the industries to make them better. \

References: [1] “http://blog.pakistaneconomist.com/2018/02/08/industrial-development-pakistan-issueschallenges/”, Feb 2018 [2] “http://jworldtimes.com/magazine-archives/jwt2016/october2016/industrial-sector-ofpakistan-situation-issues-and-solutions/”, October 10, 2016 [3] “https://www.thenews.com.pk/magazine/instep-today/211319-Concluding-failures”, 20162021 [4] “https://dailytimes.com.pk/7932/9-causes-of-slow-economic-development-in-pakistan/”, JUNE 7, 2017...