Which industries to target for export?

[VCheng]

But a country with security-obsessed policies can not be an investment destination because people who make and enact such policies exist in a comfortable cocoon, unconcerned with the sweat, toil, & tears required to produce economic growth.

So what is the way forward from this, given that reality in bold is not about to change any time soon?

 

[Nike]

Must made short term and long terms objective
Short term
1. Agriculture and poultry
2. Fisheries
3. Sports apparel
4. Defense industry
5. Heavy machinary and tooling (you got heavy industry to support your military production, why not to gear them to produce agriculture machinary and other tools)
6. Medical equipment

Mid to Long term
1. Automotive
2. Electronic
3. IT services

 

[PakSword]

What industries can Pakistan target to improve capacity for exports?

Finished goods markets need to be targeted. Too much low end raw material industry at the moment.

What can Pakistan do?

Look at this. Motherboard manufacture in Taiwan.

Taiwan shipped US$317.7 billion worth of goods around the globe in 2017

1. Electrical machinery, equipment: US$141.5 billion (44.5% of total exports)
2. Machinery including computers: $36.6 billion (11.5%)
3. Plastics, plastic articles: $20.3 billion (6.4%)
4. Optical, technical, medical apparatus: $16.4 billion (5.2%)
5. Mineral fuels including oil: $10.9 billion (3.4%)
6. Vehicles: $9.7 billion (3.1%)
7. Iron, steel: $9.7 billion (3%)
8. Organic chemicals: $9.6 billion (3.0%)
9. Articles of iron or steel: $7.7 billion (2.4%)
10. Copper: $4.7 billion (1.5%)

If Taiwan can do this or Vietnam, why not Pakistan?

You require extremely good education system to reach where Taiwan or Vietnam are standing..

1 - You need to redesign the syllabus from Grade 1 to Masters degrees.. Take out regional languages, introduce computer and ethical subjects from primary. Introduce statistics and economics from grade 9. Ethical education is a must till grade 12.

2 - You need 100% children completing high school..

3 - You need a lot of technical education institutes.. and technical education syllabus should be in line with the current demand..

4 - You require many more research universities... with state of the art facilities and good professors

5 - You require cheap renewable energy, a lot of it.. which you could supply to the industries at the cheapest rates in the region.

6 - You require peace and security.. for that you will have to do reforms in police, and other related institutions..

If today you achieve all of the above, it will require at least 16-18 years from today to get the results.. (when the new generation will get qualified after going through the above rigorous education system/ testing.

When you will have high quality engineers and technical workers available in the market, together with security and cheap energy, a lot of foreign electronics/ mechanical industries will invest in your country.. They always look for such markets, where they can find excellent technical resources, and cheap energy.. and of course... security.. This will increase your exports many folds..

People who will not find jobs in the country, will be hired by foreign countries on better pay scales.. This will increase your foreign currency remittances.. Overall, you will have plenty of dollars (or Chines Yuan in the coming years) to spend on many other sectors, such as healthcare, infrastructure, and transportation etc.. and you will eventually enter the league of first world country in the next 15-20 years..

I often hear this bloated brag even from PDF members. The reality is 200 million people export/import nearly $80 billion and most of that goes through Karachi Port. Lot of the national trading concerns have their HQs in Karachi. For instance PIA is used by all of Pakistan. Ditto Steel Mills. Just because they are based their does not mean Karachi generates the tax revenue. The tax % is of trade carried across the entire country. If I buy a car from Islamabad and it is imported through Karachi Port the % tax will collected at point of entry. That does not mean Karachi generated the revenue. The best way to see which city or region is contributing is by looking at the exports. As you said most are agri based grown across the farming country of Pakistan. Karachi is merely a transit hub. The only city that impresses me is Sialkot as clearly despite being small it generates huge amount of exports - leather, sports, surgical etc.

A substantial chunk of Sindh’s GDP is attributed to Karachi[9][10] (the GDP of Sindh as a percentage of Pakistan’s total GDP has traditionally hovered around 29%/30%).[9][10][11][12] Karachi’s GDP is around 20% of the total GDP of Pakistan.[4][5] A PricewaterhouseCoopers study released in 2009, which surveyed the 2008 GDP of the top cities in the world, calculated Karachi’s GDP (PPP) to be $113 billion as of 2014[13] It confirmed Karachi’s status as Pakistan’s largest economy, well ahead of the next two biggest cities Lahore and Faisalabad, which had a reported GDP (PPP) in 2008 of $40 billion and $14 billion, respectively.[1] (projected to be $193 billion in 2025 at a growth rate of 5.5%).[1]> Karachi's high GDP is based on its large industrial base, with a high dependency also on the financial services sector. Textiles, cement, steel, heavy machinery, chemicals, food, banking and insurance are the major industrial sectors contributing to Karachi's GDP.

 

[Indus Pakistan]

Karachi's high GDP is based on its large industrial base, with a high dependency also on the financial services sector. Textiles, cement, steel, heavy machinery, chemicals, food, banking and insurance are the major industrial sectors contributing to Karachi's GDP.

Yes I know. It essentially enjoys monopoly over 200 million people country. Sans rest of Pakistan all this would go. Example. Your a car manufacturer. You eye 200 million market of Pakistan. You decide to go for it. Karachi is ideal port and has the entire hinterland connected to it - the 200 million market. You set up the assembly plant in Karachi because you can ship the parts there easy. Then once assembled sell to the huge hinterland. Karachi itself has miserably failed to build up export industry. Sialkot has done wonders.Karachi feeds from rest of the country. Sialkot on the other hand has carved a niche in the global market.

 

[PakSword]

Yes I know. It essentially enjoys monopoly over 200 million people country. Sans rest of Pakistan all this would go. Example. Your a car manufacturer. You eye 200 million market of Pakistan. You decide to go for it. Karachi is ideal port and has the entire hinterland connected to it - the 200 million market. You set up the assembly plant in Karachi because you can ship the parts there easy. Then once assembled sell to the huge hinterland. Karachi itself has miserably failed to build up export industry. Sialkot has done wonders.Karachi feeds from rest of the country. Sialkot on the other hand has carved a niche in the global market.

Look, we aren't doing a d!ck measuring contest here.. but you have to understand that it is a failure of the previous governments that they didn't develop other areas in Pakistan..

We had to develop other industrial cities, but we failed.. All the people from all over Pakistan gathered in just one city, which couldn't provide enough infrastructure.. and the city's security situation also went out of control.. this happens when all the burden if put on just one city..

You know how many industrial zones are there in Karachi? and how big they are? and what are the implications of these zones on the health of citizens of this city..

Karachi doesn't only assemble cars, it has many other industries.. the small and medium size industry was booming in Karachi at 6.5% annual growth until recently.. A good percentage of software houses that export software are also located in Karachi.. Then you have shipyard, steel mills, pharmaceuticals, plastics etc etc etc.. People from all over Pakistan come to Karachi to setup businesses or get jobs..

Anyway, I am also against the idea of putting all eggs in just one basket.. Now that the gwadar port is being built, I hope that a sizable population will transfer to gwadar and establish industries there..

 

[That Guy]

Because you need to educate and train your workforce much more...and have good business environment with fair standards applied (so you get good quality investment and long term gestation/cultivation of such). But Pakistan has too much corruption still and there is big perception problem....and most political elite seem to be more concerned with optics and short term fixes rather than deep much needed reform.

Wheres East Asian countries by and large were able to project stability, good worker training, good bargaining power for businesses (not worried about being shaken down by whichever political thug)....and basically variant versions of the model of Japan (the original) which was proven.

It is all about getting that first chunk of 100 - 500 billion dollar capital investment over a decent spread of years and then using the buffers generated from that to invest more dynamically into new growth sectors....but you need the leadership and bureaucracy that is able to deliver that.

@Indus Pakistan @django @farhan_9909 @That Guy @Chak Bamu

I'd argue that it has less to do with corruption, and more to do with social descipline, which Taiwan and China both have, but (outside the military) Pakistan lacks. After all, both China and Taiwan have corruption issues as well, and at a far larger financial scale than Pakistan.

 

[Chak Bamu]

So what is the way forward from this, given that reality in bold is not about to change any time soon?

There is no way forward, because there is nobody to decide how things should happen. Pakistan just does not have the stable democratic institutions that have evolved over time.

But I do see a lot of anger rising in Punjab, the erstwhile bastion of Establishment support. Having a populist party in government as a result of tainted elections would at least teach the gullible ones that Pakistan's problems are not due to (gossip of) corruption, or protocol, or having a particular political party in power. They have to do with policy-making by un-elected institutions, the results of which are pinned on politicians.

 

[Village life]

Our industrial base is very weak and absolete , we need a sort term and long term export policy,
In short term we should focus on exports of agro bassed commodities, ie,high quality cotton yarn,sea food, hallall meat ,processed and non processed fruts, fresh veggies, we should force and incentivesize the multi national companies to build food processing factories, like tomato ketchup, mango pulp, apple juice, spices ,cheese production, Nestle, liver brothers, knoor etc can do it easily, multinational clothing brands can be attracted for local manufacturing and exports,Gem industry have a huge potential, Rice and sugar and onions can earn us a lot if we export it with dignity,
Second thing that we must do is to ban import of those things which we can produce locally to cut our import bill eg.,beverages ,cosmetics, cigarettes,tyres , fruit and veggies from India and China, plastic goods and toys , garments from Bangladesh ,China, thailand,indoesia,
Third thing we need to do is to set up factories immidiatly for the manufacturing of, tractors, trucks, tyres, cell phones, microchips,papers, cosmetics, precession engineering, and metal extraction,

 

[Baghial]

What industries can Pakistan target to improve capacity for exports?

Finished goods markets need to be targeted. Too much low end raw material industry at the moment.

What can Pakistan do?

Look at this. Motherboard manufacture in Taiwan.

Taiwan shipped US$317.7 billion worth of goods around the globe in 2017

1. Electrical machinery, equipment: US$141.5 billion (44.5% of total exports)
2. Machinery including computers: $36.6 billion (11.5%)
3. Plastics, plastic articles: $20.3 billion (6.4%)
4. Optical, technical, medical apparatus: $16.4 billion (5.2%)
5. Mineral fuels including oil: $10.9 billion (3.4%)
6. Vehicles: $9.7 billion (3.1%)
7. Iron, steel: $9.7 billion (3%)
8. Organic chemicals: $9.6 billion (3.0%)
9. Articles of iron or steel: $7.7 billion (2.4%)
10. Copper: $4.7 billion (1.5%)

If Taiwan can do this or Vietnam, why not Pakistan?

sex industry...............??????? all buisness in done in cash
no loan-- no credit,,

value for price ...........

you get what you pay...

 

[VCheng]

There is no way forward, because there is nobody to decide how things should happen. Pakistan just does not have the stable democratic institutions that have evolved over time.

But I do see a lot of anger rising in Punjab, the erstwhile bastion of Establishment support. Having a populist party in government as a result of tainted elections would at least teach the gullible ones that Pakistan's problems are not due to (gossip of) corruption, or protocol, or having a particular political party in power. They have to do with policy-making by un-elected institutions, the results of which are pinned on politicians.

I agree with most of what you have said, something that I have said many times before to much derision here. But the reality remains that unless Pakistan fundamentally changes its ways, it is on a steady downward spiral, and not just economically.

Having said the above, right now Pakistan has its "dream team" that much of PDF wanted by many hooks and numerous crooks (and a few spooks) , so now there will be no excuse for the lack of progress that is writ large on the walls.

 

[Chak Bamu]

I agree with most of what you have said, something that I have said many times before to much derision here. But the reality remains that unless Pakistan fundamentally changes its ways, it is on a steady downward spiral, and not just economically.

Having said the above, right now Pakistan has its "dream team" that much of PDF wanted by many hooks and numerous crooks (and a few spooks) , so now there will be no excuse for the lack of progress that is writ large on the walls.

Any issue on which 'much of PDF' agrees is probably a recipe for disaster. Seriously, there is zero introspection and the results are very evident:

Stock market bloodbath today.
Dithering over approaching IMF, when that should have been the first thing to do.

IK as PM just learnt that governing Pakistan is no easy task. He just found out that Pakistan has too few public toilets and that this is the leading reason why tourists do not visit Pakistan and spend their foreign exchange.

On the plus side and more relevant to the thread topic, I do not know if it was desperation that drove the present government to announce much improved rates for industrial use of natural gas, but this is in fact very welcome in Punjab where much of textile production capacity was suffering badly. This should have been done at least 2 years ago. There would be some improvement in textile exports. The key question is, how the favorable rates would be financed?

 

[Mage]

As of now...Pakistan should target:
1. Textiles...labor intensive industry, not much skill needed. Pakistan already produces cotton, just import the machinery.
2. Leather and Agro...Again not much skill needed.
3. Natural resources...if possible
While they are at it they can also try to:
1. Make their own medicines. Which will eventually lead to pharmaceutical exports.
2. Light engineering stuff. Maybe motorbikes, refrigerators, mobile phones.

Comparing Pakistan to Vietnam or Taiwan is pointless. Pakistan is not in a position to export machinery or computers.

Best thing is to export people to foreign countries and hope that they will send money back.

 

[CriticalThought]

Some realities.

The exports by Vietnam and Taiwan are a result of FDI. These countries do not have a home grown base of technical and scientific know-how that translates into exports. Yes, academically Taiwan is very good, but their excellence in semi-conductors is because of American investment.

When a country makes FDI in another country, it is not doling out charity. It looks to reap manyfold benefits. Thus, both Vietnam and Taiwan are dependent on foreign arms and protection for their very existence. They do not have much stature in the world.

Then there is India. Yes, there is a lot of FDI, but what India has been exporting since the 80s is human capital. India's human capital doesn't try to bite the head if its parent country like Hussain Haqqani. Secondly, this human capital has mingled so well with Western populations that today there are blonde haired, blue eyed people with an Indian Hindu background. Here in Australia so many people have actually visited India. I know an Aussie who is married to an Indian. I know another blonde Aussie guy whose family is Indian. Combine this with Veganism/Vegetarianism, Ghandism etc and they have projected themselves as this peace loving people with deep cultural roots. To the extent that people generally overlook there disgusting behavior. A female German friend of mine once told me conspiratorially, with voice merely a whisper, "You know, I have been to India. They are very unhygenic people. You are from Pakistan right? I think you are very clean and hygenic." With such deep inroads into minds all over the world, they have opened doorways to trade and are supplying quality products. I, being a Pakistani, buy India Gate rice. I have seen Pakistani rice sold in a major chain and tried it - the quality is nothing compared to India Gate. And then there is the outsourcing by Tata, Wipro etc.

We need to establish our credibility as an educated people who produce quality products. We have good values like mannerisms and decency. An educated Pakistani person stands apart from a similarly educated Indian person. We need to establish this at the national level. And that means instilling intellectual ability, education, and a drive for quality in our people.

I agree with Imran Khan's recent steps of opening up the Governor house. We need to move forward from colonialism. Millions of Pakistanis are still caught in a mindset of intellectual inferiority. This goes all the way to the top. Consider this: we needed China to come in and start CPEC. For 70 years nobody has had a vision. When Punjab wants to become educated, they bring in foreign NGOs. We can't even educate our children ourselves.

If we are going to outsource education, planning and economy, then here is what's going to happen: people will make us mental slaves. We won't be able to benefit from the Reqo Diq wealth that is ours. We need a foreign country to come in and exploit it. We need foreign companies to come in and mine the oil for us. We need the Chinese to teach us modern farming techniques. Seriously, where does this end? Will we need someone to come and breed our women for us as well?

Food for thought.

@Oscar @Bilal Khan (Quwa) @Bilal Khan 777 @Knuckles @GriffinsRule @messiach

 

[Rusty]

Agriculture needs to be the backbone of our short term development.

Pakistan needs to spend a crazy amount of money on R&D including GMO and get on the agriculture revolution.

 

[VCheng]

On the plus side and more relevant to the thread topic, I do not know if it was desperation that drove the present government to announce much improved rates for industrial use of natural gas, but this is in fact very welcome in Punjab where much of textile production capacity was suffering badly. This should have been done at least 2 years ago. There would be some improvement in textile exports. The key question is, how the favorable rates would be financed?

The entire energy sector in the country is a huge mess due to incessant mishandling and meddling by incompetent people from top to bottom, with all the attendant consequences on industry and quality of life. Right now, the problem will be managing the subsidies that large swathes of society have come to expect as their right, and the elites who do not pay what is fairly due, including civil and military enterprises, and the logical demands by any international rescue lenders to eliminate them. Hence, I do not see the present strategy to be feasible in the long term.