Pak govt working on broad-based industrial policy

Karachi: Federal industries and production ministry has been chalking out a broad-based industrial policy to address problems faced in the growth of industrial development, which contains short-, medium-, and long-term measures to explore import substitution to boost export and bridge the gap of trade deficit.

About problems in the small and medium enterprises (SMEs), there is a lack of infrastructure in the way of SMEs development. For this, the ministry has held meetings with the international donor, ie the Asian Development Bank (ADB) for the establishment of internationally recognised accredited microbiology testing lab, accredited chemical testing lab and accredited footwear-testing labs.

The ministry provided recommendations to the Federal Board of Revenue (FBR) on customs duty relating to the industrial sectors ie other than food, textile and leather. The rationalisation of tariff structure for the competitive production of goods by the local industry is undertaken through budget exercise in the Engineering Development Board (EDB).

The exercise involves 17 to 18 committees on various sectors under the private sector stakeholders. The proposals emerging from these sectors are then analysed in the meeting of convene. The minister identified problems faced by industries in Pakistan as follows:

(i) Relatively narrow industrial base, (ii) low technology base, (iii) predominately low tech goods produced (around 90 percent), (iv) low value addition (textile and leather contribute 12 percent towards GDP), (v) inadequate infrastructure, (vi) multiplicity of procedures, taxes and regulations, (vii) absence of linkages between industry and academia/research institutes, and (viii) security and governance issues.

The ministry identified existing potential areas for investment includes engineering goods industry and services, machine tool, energy equipment, telecommunication, basic industries of forging, castings and foundry work, automobiles, marble, ceramic and stones development, plastic and chemicals, paper and paper board, glass and basic metals offer high potential for industrial development.

The strategies/recommendations of the ministry to address these problems includes (i) reforms in fiscal regime through tariff relaxation/rationalisation, (ii) growth of large scale and hi-tech anchor/main industries, (iii) high incentives for project requiring higher capital investment, long gestation periods, and higher level of technology, (iv) expansion of macro, small and medium enterprises, encourage projects that result in transfer of technology,(v) implement intellectual property rights laws, (vi) develop and implement strategies for rural industrialisation. (vii) reduction in cost of doing business, (viii) establishment of industrial parts/clusters, (ix) quality human resources, (x) development linkages between industry, academia and research institutions, (xi) mandatory certification and accreditation, and (xii) introduction of productivity enhancing reforms.