Cellphone manufacturing
That nearly all of the 30 mobile assembly units in Pakistan have shut down is extremely concerning and has put at risk the future of some 20,000 employees. The closure of these plants will have a significant impact on the socio-economic landscape of the country, as the phone manufacturing industry is a significant contributor to growth and development.
The major reason for the closure is high cost of production due to the increased taxation on imported raw materials. Manufacturers lay blame on absurd government policies and inability to get a letter of credit from banks. The closure of these manufacturing plants will not only result in the loss of jobs but will also have an impact on the country’s technology industry. Pakistan has been trying to establish itself as a hub for technology and innovation, but the closure of these plants will have a detrimental effect on its progress and may even put us further behind than we anticipated. This will indeed discourage foreign investors from investing in Pakistan’s technology industry, and lead to brain drain of skilled workers to other countries. Moreover, the government should be wary of the fact that the closure of these plants will lead to an increase in mobile phone imports, which in turn will have a negative impact on the country’s foreign exchange reserves. It is equally important to consider the social implications of this as low-cost phones will not be available to the masses. Many poor workers and families will be devoid of this essential resource, thus decreasing their standard of living.
In light of this, the government should seriously consider revising its economic and import policies to reduce the burden on the manufacturing industry, making it easier for companies to operate in Pakistan. They must provide incentives amid tough economic conditions to create a business-friendly environment and encourage investment.
Published in The Express Tribune, April 4th, 2023.
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