Discover the crucial role of the private sector in driving industrial development in Pakistan and the challenges it faces in contributing to the country’s economic growth.
When Pakistan come into being, its industrial landscape was almost like that of a barren land. Private sector, due to lack of expertise, experience, capital and technical know-how, was very shy in Investing capital in industrial sector. The industries particularly those requiring huge investment and vast experience, remained almost neglected by the private sector.
Role of Private Sector in the Industrial Development of Pakistan
In such a disperate situation, Pakistan Industrial Development Corporation (P1DC) made a breakthrough. The Corporation started functioning from 1952. The main function of the Corporation was to establish preferably those industries in which private sector did not show interest due to lack of required ‘experience and capital, or in such industries which were of vital importance from security and economic point of view.
The Corporation, originally was made responsible .to promote 15 specified industries. They include:jute, paper-board and newsprint, heavy engineering included iron and steel, ship-building, heavy chemicals, fertilizers, sugar, cement, textile, chemicals, pharmaceutical and dey- stuff. natural gas. power generating from natural gas, petrochemicals, coal and peat, exploitation of marine fisheries.
The performance of private sector in the development of large and small scale industries is very laudble. In a short period of one decade-form 1957 to 1967, all-round development in industrial sector emerged. The country became self-sufficiency in most of the agro-based industries. The industrial base became widened and diversified to some appreciable dimensions, the period 1960 to 1970 proved to be the best period of the economic history of the country regarding to industrial investment made by the private sector.
However, such a good performance of the private sector was also the result of appropriate government’s industrial, commercial, Fiscal and trade policies. The main features of government’s various helpful policies were as under;
- The government, in order to speed up the process of industrialization, extended liberal tax concessions to industrial undertakings in private sector.
- Protection was given to selected infant industries like a bicycle, electric cables, paints, washing soap and recoiling etc. against the competition of foreign competitors.
- The government set up 10 industrial estates wherein required infrastructure facilities were fully provided for growth and expansion of industries included in private sector.
- The introduction of Export Bonus Scheme gave a boost to the export of manufactured goods.
- The import entitlement against Export Bonus Vouchers stimulated the imports of consumers as well as capital goods. The import of machinery and spar parts thus helped in expansion of industries.
- Commercial banks and insurance companies established in private sector, greatly helped in financing industrial development.
- The import of industrial machinery against liberal issue of licenses also helped a lot to the growth of industries.
The gigantic task of nationalised industries management was assigned to such government officials who had no previous experience to run them efficiently. Besides that, executive posts were assigned mainly on political affiliation rather than on merit base. Consequently, due to mass scale of mis – management and mis – governance, all nationalised industrial concerns gradually lost their performance to that extent the country become dependent in most of those industrial products in which it had become self – sufficient before nationalisation.