Shifting of Capital & Industries from Pakistan : A Critical Analysis

2.12     A report published in the daily Nation on April 23, 2012, states that India allows Pakistani industrialist to set up industries in India.[12] India has offered lots of incentives to Pakistani businessmen for establishment of their business in India. Therefore the investors are availing this opportunity to get more profit especially due to the unfavourable working environment in the country. This will be in the interest of India because in the long term, due to establishment of these industries more job opportunities will be created in India. On the other hand, it will be a great loss for our country because many industrial units will be closed down and shifted to India creating more unemployment in Pakistan which will increase terrorism, extremism and the crime rate in the country. At the same time India will be benefitted from the export related production which will boost Indian trade, where as Pakistan economy will go further down.

2.13    The government has no accurate information and exact data regarding flight of capital and industries from Pakistan. According to unofficial record, 40 per cent textile units have been shifted from the country. The flight of capital has also resulted negative impact on the fixed investment. Statistics show that fixed investment declined to 10.9 per cent of the GDP during the financial year 2011-12 as compared to 11.5 per cent of GDP during the financial year      2010-011. Because of better opportunities, market access and incentives businessmen have shifted their business to other countries. In Punjab 53 industrial units were closed due to power crisis. In KP 1500 industrial units were badly affected due to power crisis. Another 2,000 industrial units in the province were closed down due to war on terror.[13]

2.14     If immediate measures were not taken by the government to ensure uninterrupted supply of electricity and gas to the industrial sectors besides reduction in tariff and fuel prices and to improve the law and order situation, industrial sector will collapse and it will result more flight of capital and industries from the country.


In Pakistan the unemployment is increasing day by day due to high population growth rate on the one hand and large numbers of educated young men and women who are entering in the job market every year on the other hand and not finding any place for their adjustment.  To address this issue the government should have to revive and boost industry on war footing because in this way more employment opportunities can be created.

3.2       Continuous rise in fuel prices, coupled with more frequent electricity and gas load shedding has damaged the industrial sector. Industrial units have been closed in Pakistan and capital has been shifted to pro-industry countries like China, Malaysia, Sri Lanka, India and Bangladesh. Large numbers of industrial workers are rendered jobless and situation is heading towards massive labour unrest.

3.3       In this era of industrialization when there is a need to provide facilities to the industrial sector which other countries of the region are providing, the situation in Pakistan is quite opposite, due to defective policies of the government which have destroyed Pakistan industries. Besides fuel crisis, law and order situation in the country, target killing, street crimes, kidnapping for ransom and extortion culture have forced the businessmen and industrialists to close their business from Pakistan and setting up abroad.

3.4       The government has failed to protect and promote industry and safeguard the right of labour. Lack of economic reforms coupled with rampant corruptions and kick backs culture in every sector of life has shattered the very economic and social life of the people of this country. The government is least bothered about the frightening results of this gloomy situation and only thinks about its vested interest.              Supply of Power to the industry is a major issue as it affects the entire economy. It is therefore necessary that the government should prepare short term and long term strategies in consultation with key stakeholders to increase the efficiency of energy sector in Pakistan with special reference to power generation.

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