Python Notes for mca i year students osmania university.docx
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Issues in Pakistan Industry
1. KEY ISSUES IN INDUSTRY IN
PAKISTAN
Group Members:
â˘Rabia Farooqui â˘Umm E Rabab Rizvi
â˘Aunuddin Qadri
â˘Rehman Siddique â˘Usama Batavia
â˘Sehrish Irfan
â˘Roshanna Durrani â˘Usman Farooq
â˘Saroosh Zahid
â˘Saad Imtiaz â˘Versha Qazi
â˘Shahrukh Samad
â˘Saad Zahid â˘Yawar Masood
â˘Syed Danial Mus
â˘Sadiq Samin â˘Zulfiqar sajwani
â˘Tayyaba Sami
Omar Mahmood
2. Numbers and Trends in Industry
â˘Growth in industrial sector rose dramatically in 1950âs
and 1960âs
oReason: Initial Investment
â˘The growth rates of small scale sector rose.
â˘Small scale sector was more productive in Pakistan.
â˘The shift of textiles from large to small scale.
â˘The growth of informal sector underestimated.
â˘Growth in mining & construction industry
remained volatile until 1970âs-economy began to
expand.
3. Numbers and Trends in Industry
â˘1970âs nationalization-increase in growth rates.
â˘Domination of public sector.
â˘1990âs privatization-role of private sector increased.
â˘Share of textile was the highest in the Manufacturing
Sector.
â˘Population rose but employment in formal
manufacturing industry reduced-employment rose in
informal sectors.
â˘Large scale industries became capital intensive.
4. The Small-Scale Manufacturing Sector
Characteristics
â˘Growth rates were higher than formal sector.
â˘Employment in informal sector rose dramatically
â˘The share of informal sector slightly increased.
â˘Textiles, fabricated metals and food and tobacco
were the largest sectors.
â˘Formal sector was highly capital intensive.
5. Emergence and Growth
â˘The green revolution in 1960âsď small scale industry
began to grow.
â˘Demand for agricultural machinery rose.
â˘The devaluation of 1972 favored SSIď SSI products
were export oriented.
â˘Import liberalizationď industrial capital diverted to
exports paving way for SSI products.
â˘Cottage industries act of 1972ď shift from LSM to SSI.
â˘1970âs and 1980âsď remittances rose and home
demand increased.
â˘Middle class prospered.
6. Issues Affecting Small Scale Sector
â˘Unwaged family workers in small sector.
â˘Labor displacement in formal sector.
â˘Formal sector had high labor productivity
â˘Informal sector had higher capital efficiency.
â˘Government policy only favored LSM.
â˘This gave hands off policy to SSI.
â˘Linkages of LSM with SSI gave another boost to SSI.
â˘Unavailability of credit to SSI was the major issue.
7. Issues Affecting Small Scale Sector
â˘Other ways to obtain credit were used.
â˘SSI generated 25% of Pakistanâs export earnings.
â˘The government needed to provide SSI
appropriate credit packages.
8. Textile Industry and its crisis.
⢠Textile sector holds a significant position in
Pakistan
> employment
> value added
⢠Pakistanâs textile industry
was quite prominent and
emerging in world cotton
textile market in 1960âs
and 70âs.
9. Comparison of Pakistanâs Textile
Market with Hong Kong and Korea
⢠1972 â Korea and Hong Kong had less share in
the world textile market than Pakistan
⢠1988 â Pakistanâs poor performance.
-- Pakistan had lesser share than Korea
and Hong Kong
10. Reasons for decline
⢠Pakistanâs textile industry concentrated
amongst few industrial houses
⢠Performance of looms and spindles
⢠Shift from large scale to small scale
manufacturing and its impact
⢠Interest of state towards public sector
intermediate and capital goods industry
⢠Impact of Cottage industry Act (fragmentation
of firm size)
11. ⢠Pakistan failed to diversify
⢠Relied only on growth in world market
⢠Pakistani entrepreneurs ignored up gradation
⢠Pakistan was unable to meet quotas of
advanced capitalist countries
⢠UNIDO pointed out factors that led to decline
12. Some facts
â˘Pakistan is worldâs fourth largest cotton
producer.
â˘Pakistan is one of worldâs largest cotton
exporter but its exports have low value added
â˘Low level of technology
â˘Pakistan occupies dominant position in low cost
low quality cotton fabrics market
13. Recommendations
⢠Pakistan must enter high quality textile market
⢠Improve quality standards
⢠Move into production of synthetic
fibres
⢠Invest in R&D of different types
of cotton, especially long staple
superior variety
14. Has Public Sector Industry Been a
Failure?
⢠Diminished role of the state
⢠Public sector
⢠Inefficient
⢠Costly
⢠Poor performance
⢠Drain on exchequer
15. ⢠Nationalization program of ZA Bhutto in 1972
⢠Role of PIDC and success in jute, fertilizer, cement
industries
⢠Ziaâs regime followed by
Privatization
⢠Socio-political goals of the
Government
⢠Studies of Asad Sayed
criticized by the World Bank
16. ⢠Studies of Nawab Haider Naqvi and AR Kemal
include-
ďąRates of protection
ďąEfficiency level
ďąAllocative Efficiency
ďąCapacity level
17. The Privatization Process
⢠Structural Adjustment Program begun in 1988
⢠65% of targeted industries privatized
⢠Disinvestment and Deregulation Committee
ď 109 units to be privatized at earliest
opportunity
⢠New Privatization commission
formed in 1991
18. ⢠Initially unsuccessful- Government
had to revise its policy
⢠More transparent and effective
procedures
⢠Transfer of 49 units to private
sector by 1992
⢠Reason of failure ď Companies were already bankrupt
⢠Energy, Telecom and Commercial
banks converted most.
19. ⢠Lack of sufficient information for investors
⢠Process criticized for:
ďź Lack of transparency
ďź Inconsistency
ďź Favoritism and corruption
ďź Lack of planning
ďź Failure to float equity in market
⢠Naqwi and Kemals findings
20. Debate over Efficiency in Industrial
Structure
⢠By the end of 1960s, it was realized that elevating
growth required substantial costs.
⢠Industrial structure was highly inefficient.
⢠Reasons:
ďźState intrusion
ďźToo much emphasis on manufacturing sector
ďźIgnorance to agricultural sector
ďźMultiple exchange rates
21. â Taxes
â discouragement to technical change
â Unintelligent use of capacities.
â Wastage of resources
⢠However, growth still occurred. Most of the sectors
still showed growth prospects.
⢠Industrial sector did show vigor to develop and
advance.
⢠Many critics believe that the
inefficiencies have been overstated
22. ⢠They believe that allocated inefficiencies were
remunerated by gains that followed.
⢠Many believe that this efficiency led to Industrial
Crisis in 1970s
⢠Overall, small scale industries were the nutrients
to Pakistani economy in the era.
23. ⢠Public sectors efficiency cannot be denied, but
was much more widespread.
⢠Privatization was a political stunt, as per
opinion.
⢠Flaws were mostly structural.
⢠Consensus: Inefficiency was due to
overprotection and distorted
incentives.