Changing fortunes: Time to revive 1,400 closed units in K-P

The PTI govt can generate great support if it pulls off this feat.

KARACHI: Karachi’s population explosion can be defused to a great extent if the new Khyber-Pakhtunkhaw (KP) government takes effective measures to restart over 1,400 closed industrial units in the province. Though there is no doubt that the main beneficiary will be the people of K-P, it will definitely help in restricting the migration of a large population to the financial capital of the country. In fact, on the contrary, people may start migrating from Karachi back to their native towns. Naturally so because after the closure of those factories about 1.5 million people who migrated to Karachi in search of bread and butter will prefer to go back to their hometowns to take their rightful place back in their respective industries.

With a dynamic person like Imran Khan at the helm of affairs it is hoped that the PTI government of K-P will do its level best to revive all those closed manufacturing plants to stamp out unemployment in the province, which is the main cause of terrorism. According to a report, with the closure of these units 60 percent of the industrial workers previously employed were rendered jobless. It is worth mentioning here that while it is the third largest province, population-wise, it can employ less than a meagre 7 percent workforce of the nation and that too when all its closed units are made operational. Right now the industry in K-P is employing less than three percent of the nation’s industrial workforce.

Asad Omar is undoubtedly a name to reckon with in the corporate world and he is definitely playing a pivotal role in the policymaking of the PTI. Historical facts reveal that all the developed countries of the world broke the vicious circle of underdevelopment by industrialisation. So the expectations from the present rulers of K-P are very high, more so because they have a dynamic team which can deliver.

The provincial government, therefore, should work out a plan to restart the over 1,400 closed plants on an urgent basis. After the revival of the shut units it must also devise ways to encourage setting up new industries in the province.   Free schooling and free medical service will not solve the problem, because at the end of the day, the people need hard cash to buy food for the dependants. Therefore, the foremost task before the government is to strengthen the base of industrial growth in the province.

But for a man who can build one of the best hospitals in the country, bringing in investors and entrepreneurs should not be a very big problem despite the prevailing situation in the province. The K-P government also must realise that the salvation of the province solely depends on industrialisation and nothing else for every hundred thousand jobs that industry provides directly, it creates three times as many jobs downstream.

The PTI government should begin with Gadoon Amazai Industrial Estate for the revival of industry in the province. If it succeeds in Gadoon, it will be easier for the government to set up more industrial zones in other parts of the province. Initially 228 units were established in Gadoon Amazai Industrial Estate, with a total investment of Rs9.123 billion and employment provided to about 20,000 workers. The process of industrialisation in the province suffered a setback when the incentives and concessions granted to the investors and entrepreneurs either stood expired, or were prematurely withdrawn by the government during the period 1991-95. As a result, industrial units started closing down.

A comprehensive plan and concerted efforts could improve the situation and finally would take the province into an era of progress and prosperity. The federal government should consider the provision of some sorts of incentives in the form of reduction in the price of electricity, permission for the export of goods from EPZ Risalpur, transportation subsidy and establishment of stock exchange, etc., for the development of industrial sector in this backward region.

The province is bestowed with rich natural resources, a hardworking population and immense opportunities for investment. However, industrially the province is backward and its share in the total installed industrial units is just 7.5 percent. Industries in K-P could not contribute significantly to the economic development of the country, because majority of the industrial units are not working, for one reason or the other.

The K-P government can take full advantage of the Law of the SEZ which has been made to meet the global challenges of competitiveness to attract the FDI. The Law allows creating industrial cluster with liberal incentives, infrastructure, investor facilitation services to enhance productivity and reduce cost of doing business for economic development and poverty reduction. The Law further envisages reducing processes through the SEZ in Pakistan. The establishment of the SEZs will attract both domestic as well as international investors. The writer is a freelance contributor and a PR consultant

Published in The Express Tribune, October 21^st, 2013.

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