Shifting of Capital & Industries from Pakistan : A Critical Analysis

1.6       During the last five years around 200,000 power looms have been shifted to Bangladesh which has caused lot of unemployment in the country. In southern Punjab, only more than 60,000 families who were dependent on daily wages are finding it difficult to make both ends meet due to job losses. In the whole Punjab 200,000 families have been directly or indirectly affected.[5]

1.7       The Government needs to formulate a comprehensive long term strategy to solve the problems faced by the industry. Both exporters and local manufactures are really disappointed with the way the government is handling the situation. Bangladesh textile sector has made such an impact on the international companies that most of them have set up their buying houses there. This has also forced Pakistan manufactures to travel to Bangladesh to get orders for their export goods around the world.

1.8      Unfavourable economic conditions and other related factors like law and order situation and energy crisis has forced the investors to leave Pakistan and shift their business to other countries including Bangladesh, China, Malaysia, Dubai and Sri Lanka etc. Due to rapid flow of investment from Pakistan has caused an unprecedented unemployment which has weakened the country’s economy. Law and order situation is totally out of control of the government agencies. Increasing incidents of Bomb blasts, kidnapping, ransom and murders of traders, extortions in the industrial area and government’s failure to protect the local industry has developed great sense of insecurity among the business community.

1.9       The Government stance is totally different. Federal Minister for textile termed it as profit motive of the businessmen. However he turned down the claim that industries were relocating to Bangladesh because of electricity and gas load shedding. He said that Bangladesh textile receives special privileges from EU and the US which is major market for textile companies so in order to their market share, companies are shifting to Bangladesh.[6]

1.10     Short of electricity is a major problem in Pakistan due to which the industry is suffering a lot. The acute energy shortage has adversely affected the industrial sector badly. The government has failed to provide the uninterrupted supply of electricity to meet the demand of the industry. This problem has arisen due to lake of planning and foresee on the part of our successive governments to take timely measures for increasing the energy supply according to the demand of the country which has rising manifold during the last two decades. The successive governments perhaps were not anticipating this sharp increase in demand and they did not take timely measures to control the situation.

1.11     In Pakistan it is very unfortunate that there is no continuity of policies as every government runs the affairs of the state according to its own priorities and interests. It is observed that due to lack of government initiatives for privatization and delays in tariff reforms the IPPs did not take much interest to make substantial investments to improve and upgrade their existing infrastructure which could help to generate more power. Circular debt is another big issue in Pakistan which the government has failed to address. Due to nonpayment of long outstanding dues to power companies has resulted decrease in electricity generation.

1.12     If we analyse the use of energy mix trend of Pakistan it reveals that Pakistan uses 50% natural gas and 30% oil as compared to other neighboring countries which mostly rely on coal therefore the trend for using of gas and oil as energy mix is very high in Pakistan. In Pakistan we have abundant coal resources which can be used to generate more power. This will also help to reduce the cost of production thus making industry more competitive. To bridge the gap between supply and demand there is also need to explore other means for the generation of electricity through hydel power which is another cheap source of supply of electricity. It is therefore required that the government should shift the energy mix in the coming years by placing more reliance on the power generation through hydel and coal. The government should also encourage the masses to use wind energy and solar energy technology. For this research can be done on pilot projects with the assistance of   foreign and local experts and relevant government departments.

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