Shifting of Capital & Industries from Pakistan : A Critical Analysis

The government has to look all possible measures to solve the problem of energy crisis and to improve the law and order situation. Besides this the government will have to provide special incentives to attract the local and foreign investment. This can be in the form of setting up of free industrial and economic zones across the country where the industrialist should be given special facilities for setting up of their industry. There is also need to promote medium and small enterprises and cottage industries to generate employment opportunities. Government should also spend more on education sector especially for promoting technical education to produce skilled workers.

This can only be possible with the strong political will and commitment of the government.


Restoring foreign and local investors confidence

There is an urgent need to restore the confidence of foreign and local investors as they have to play a vital role. For this the government should give special incentives for setting up of new industries, ensure uninterrupted supply of electricity and gas to the industrial sector and reduce the tariff. In order to solve the issue of energy crisis the government should explore alternative energy resources i.e., wind energy, coal, solar and nuclear power to generate the electricity and to meet the shortfall.

Focus on Poverty alleviation and economic reforms

Due to lack of economic reforms, the businessmen have lost their faith on the government and started shifting their capital industries outside Pakistan. This has resulted closure of large number of industrial units which has created unemployment and increase in poverty. The government should focus on socio-economic reforms which help in providing employment opportunities and poverty reduction.

Promote research and development in the industrial sector

The revival of the Pakistan economy lies with the progress of industrial sector for which improvement in technical efficiency can be made through research and development activities in the manufacturing sector .In the modern world stress is always given on research and development. However in our country no serious efforts are made towards this important aspect. Therefore special emphasis should be given to promote research and development in the industrial sector.

Building strong institutions having no political interference

In Pakistan there is a culture of political interference everywhere which has weakened our institutions. So there is a need to develop strong institutions and free from any political interference.

Strict enforcement of rule of law

Law and order situation in the country is very unsatisfactory which has forced the flight of capital and industry from Pakistan. So the government should take special   measures to ensure strict enforcement of rule of law and control the law and order situation.

Increase use of Technology

In Pakistan the performance of the manufacturing sector for manufactured exports in the world market is not very encouraging because of production of low value added and less technology intensive goods which have no share in the world market. Therefore increase use of technology is a must to produce good quality of products according to the best international standard.

 Expansion in the Industrial base

In Pakistan due to highest population growth there is always a need to expand the industrial base to accommodate the surplus labour otherwise it will lead to socio-economic and political consequences. Therefore for sustained economic growth and employment generation, growth and development of industrial sector is very vital.

Besides this Pakistan main exports are from two sectors i.e.  Textile and rice only therefore in order to enhance export competitiveness, there is an urgent need to shift the focus from low to medium and high value manufacturing.


There is also need of political stability in the country, effective management and steering of economic plans, strong human resource management and emphasis on promoting of technical education and skills.



  1. State Bank of Pakistan Annual Report 2010-11
  2. Asian Development Bank Outlook for Pakistan 2012
  3. MOI study on “Industrial Policy, Its Spatial Aspects and Cluster Development in Pakistan” prepared by LUMS.
  4. The Express Tribune, January 31, 2012
  5. Pak Observer Article “Aftermath of Energy Crisis” May, 2012
  6. Daily Dawn Article “Poor Governance Deepens Energy Crisis dated April 16, 2012
  7. Daily Business Recorder dated June 18, 2011
  8. Daily Nation dated July 3, 2012
  9. Daily Nation dated April 23, 2012
  10. Daily Nation dated August 08, 2012

[1] (The Express Tribune January 31, 2012).

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