Articles of the year 2005

Economic Priority
Published on February 10th, 2005

With all the hoopla and drum bashing about the success of the Expo 05, a showcase for Pakistan Industry, someone is missing the vital statistics. China ,India Bangladesh are all racing ahead in putting up factory after factory, we in Pakistan have the distinction of not one new factory in the last 5 years. In fact most of the Electric Goods manufacturers are importing fully assembled A/Cs and Fridges from China, in their own Brands and marketing them here. Their own plants are being shut down as they cannot compete with the Chinese. Chinese shoes and leather items once a private preserve of the Pakistani, manufacturers are now importing Chinese shoes and selling them with their own label. It would seem that Pakistan is also copying the US manufacturers by outsourcing its production!Taken to its logical conclusion we will soon end up as a consumer market with our exports restricted to Textiles. It will not be long before this area is also taken over by the Chinese. Land prices are going through the roof, and at latest count a house on 300 yards bought for 1.75 Crores was asking for and fetching upwards of 2.5 Crores. This represents a price jump of 1 Crore in one year alone. These figures are matched by Lahore prices and Islamabad is even higher.This dramatic jump is impressive more so because it high lights the lack of other investment opportunities available to the money that is available. While this may give comfort to all the existing householders it does not create job opportunities for the huge pool of the unemployed which number is growing by the day.

The Governor of the State Bank while winning prizes for his Banking expertise must now apply his skills into increasing Industrialization, Job creation through Industrial Production. The opportunity that has presented itself, by the massive inflow of funds should be availed, and not frittered away in construction of Plaza after Plaza. These Plazas are very attractive but not if they are stocked with Chinese Goods. A quick walk through the Markets will bear witness to this disturbing phenomenon. The Prime Minister and his Cabinet should be advised to forget their trips abroad to drum up the investors, they should look closer to home and encourage the local investor to put up factories, for manufacture and not just Service Industries. Sadly, the Call Centers are services and not manufactured products. While this is indeed a valuable addition to the employment pool it does nothing for the manufacture of goods or Export thereof. For all the Hype about IT , can Dr. Ataurahman show us his export figure for Software? It would make interesting reading.

It may well be advisable to take a page out of Benazir's era when such a rush was created that scores of Power plants were put up. There are many who would criticize this huge investment, at inflated prices, but the shortages that would have prevailed in the Country would have been a night mare making life much more difficult.The President is being misled by the glitzy presentations, and the high tech buzzwords doing the rounds. The Stock Market performance, the number of new cars on the roads, the property prices, are all part of the hype he should not be taken in by all this. He should ask to see the list of new factories being established.

The selling of Habib Bank, the selling of KESC. This is a sad day for the Industrialists of Pakistan. They should have been in the forefront, bidding for the family silver.. Our Pakistani business groups should be buying Factories and businesses abroad, instead of watching our assets being bought by Foreign interests. Unfortunately they have been strangled by Bhutto's nationalization, and the stigma against the businessman that lingered on. They never quite managed to shake this off , getting left behind in the process. Is it not strange that Bangla Desh has managed to produce Businessmen that would our groups to shame?The Prime minister should instruct his money manager Dr. Ishrat to dump his Prudential regulations, and get on with loosening the purse strings for the local investor. What good are his reserves if they are being invested in Treasury Bills abroad --- or being used to import Japanese cars, and Chinese Electronic Goods?