session viii jahangir

7/28/2019 Session VIII Jahangir

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Towards a Prosperous Pakistan:Towards a Prosperous Pakistan:A Strategy for Rapid Industrial GrowthA Strategy for Rapid Industrial Growth

Pakistan Development ForumPakistan Development Forum

Federal Minister Industries, Production & SpecialFederal Minister Industries, Production & SpecialInitiativesInitiatives

2626ththApril 2005April 2005


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22

Strategy for IndustrializationStrategy for Industrialization

Where are we today?Where are we today?

An assessment of our Industrial performanceAn assessment of our Industrial performance

so farso far

99Share of Manufacturing in GDPShare of Manufacturing in GDP

99Export performanceExport performance99Consistency of GrowthConsistency of Growth

99Private Investment performancePrivate Investment performance

99Comparison of Job CreationComparison of Job Creation

99Manufacturing Technology levelManufacturing Technology level


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33

Share of Manufacturing in GDP (%age)

0

5

10

15

20

25

30

35

40

45

1960 1965 1970 1977 1980 1985 2000 2001

PercentageShare

Pakistan Indonesia Malaysia Korea

Source: World Bank - World Development Reports


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44

Export of manufactures 1990 2002World % %

China 1.85 6.21Mexico 1.06 2.88

Malaysia 0.66 1.57Thailand 0.61 1.1

India 0.52 0.70Pakistan 0.18 0.18

Source: WTO, Sherani (2004)

Pakistans Share of World Exports


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55TRADE BREAKUP World Vs PakistanTRADE BREAKUP World Vs Pakistan--20032003

World Trade Breakup

Manuf & Eng

Goods,

69.50%

Misc, 3%

Textile &

clothing,5.60%

Mining &Fuel, 10.80%

Non-Ferrous

Metals, 1.80%

AgriProducts,

9.30%

Pakistan Trade Breakup

Textiles,66.1%

Chemical,

1.7% Carpets, 2.4%

Others 5.6%

Marble

Granite , 0.4%

Engineering

goods, 3.9%

Petroleum,

2.2%

Sports

Goods, 2.7%

Leather, 6.3%

Agri

Products,

8.8%


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66Industrial Performance of Pakistan : Growth Rate of

Manufacturing

0

2

4

6

8

10

12

1950s 1960s 1970s 1980s 1990s 2000-01 2001-02 2002-03

%

age

Total

Source: 50 Years of Pakistan Volume I Summary, Statistical Supplement of Economic Survey, 2002-03 and

Economic Survey 2003-04.


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Source: World Development Indicators 2004, Pakistan Economic Surveys 1987-88,

1992-93, 2003-04

Figure 2.2: Trends in Private Investment (% of GDP)

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

20.00

1

98

0

-81

1

98

1

-82

1

98

2

-83

1

98

3

-84

1

98

4

-85

1

98

5

-86

1

98

6

-87

1

98

7

-88

1

98

8

-89

1

98

9

-90

1

99

0

-91

1

99

1

-92

1

99

2

-93

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99

3

-94

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99

4

-95

1

99

5

-96

1

99

6

-97

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99

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-98

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99

8

-99

1

99

9

-00

2

00

0

-01

2

00

1

-02

2

00

2

-03

India

Pakistan

Bangladesh


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88Employment in industry (% of total employment)

20.3

13.8

24.4

12.9

17.118.4

31.7

13.6

0

5

10

15

20

25

30

35

Pakistan Thailand Malaysia India

1982 1999

Source: World Development Indicators, Various years


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99

Source: 50 Years of Pakistan Volume I Summary, Statistical Supplement of Economic Survey, 2002-03 and Economic Survey 2003-04.

Industrial Performance of Pakistan: Manufacturing Share of Pakistan in GDP

0

2

4

6

8

10

12

14

16

18

20

1950s 1960s 1970s 1980s 2000-01 2001-02 2002-03 2003-04

%

ageshare

Total Large Scale Small Scale

Source: 50 Years of Pakistan Volume I Summary, Statistical Supplement of Economic Survey, 2002-03 and Economic Survey 2003-04.


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1010

0%10%20%30%40%50%60%70%80%90%

1981 2000 1981 2000 1981 2000 1981 2000Resource Low Technology Medium Technology High Technology

Pakistan India China Malaysia Thailand

Technology Intensity in Manufactured Exports (%)

0%10%20%30%40%50

60%70%

80%90%

1981 2000 1981 2000 1981 2000 1981 2000Resource Based Low Technology Medium Technology High Technology

Pakistan India China Malaysia Thailand

Technology Intensity in Manufactured Exports (%)Fig 1. 5 Technology Intensity in Manufactured Exports

Source: Lall, 2003


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1111

Our VisionOur Vision

ReRe--position the Ministry of Industries,position the Ministry of Industries,

Production & Special Initiatives to play aProduction & Special Initiatives to play a

leadership roleleadership role in formulating andin formulating and

implementing a comprehensive strategyimplementing a comprehensive strategyforfor rapid industrializationrapid industrialization of Pakistanof Pakistan

which aims at maximizingwhich aims at maximizing job creationjob creationand enhancing Pakistanand enhancing Pakistanss internationalinternational

competitiveness.competitiveness.


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Our MissionOur Mission

To increase the share of Manufacturing inTo increase the share of Manufacturing in

GDP to 25% in 2010 and 30% in 2015GDP to 25% in 2010 and 30% in 2015..To achieve this throughTo achieve this through

99value addition in Textile sectorvalue addition in Textile sector99focus on the engineering sectorfocus on the engineering sector

99making holistic interventions across themaking holistic interventions across theentire value chain in key SME clustersentire value chain in key SME clusters

99directly improving living conditions for Labourdirectly improving living conditions for Labour


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Our MissionOur Mission

99reducing the cost of doing businessreducing the cost of doing business

99creating a strategic partnership betweencreating a strategic partnership betweenthe Public and Private sectorsthe Public and Private sectors

99fostering ownership of Industrialisationfostering ownership of Industrialisation

policy by the public at largepolicy by the public at large

99creating an institutional framework forcreating an institutional framework for

interinter--ministerial coordination forministerial coordination forindustrializationindustrialization


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Value addition in Textile sectorValue addition in Textile sector

Upgrading ginning sectorUpgrading ginning sectorContamination free cottonContamination free cotton

Upgrading productivity of garmentUpgrading productivity of garmentsectorsector

Investing heavily in Fashion designInvesting heavily in Fashion design

Creating International brand namesCreating International brand names


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Focus on Engineering SectorFocus on Engineering Sector

Engineering Development Board (EDB) as focalEngineering Development Board (EDB) as focalinstitutioninstitution

99Chairman & CEO both from private sectorChairman & CEO both from private sector

EDB Role enhanced to createEDB Role enhanced to create

99Link with International value chainLink with International value chain

99Link with Engineering academicsLink with Engineering academics99Bridge between Defence HiBridge between Defence Hi--Tech sector and PrivateTech sector and Private

sectorsector

99Bringing an International Vision to existing industryBringing an International Vision to existing industrysectorssectors

Component manufacturing SectorComponent manufacturing Sector

GinningGinning

Metal ReMetal Re--rollingrolling


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Focus on Engineering & SME SectorsFocus on Engineering & SME Sectors

Creation of Technology UpCreation of Technology Up--gradation & Skillgradation & SkillDevelopment Company (TUSDEC)Development Company (TUSDEC)

99PublicPublic--Private PartnershipPrivate Partnership CEO from private sectorCEO from private sector

99PITAC to function under TUSDECPITAC to function under TUSDEC

99Role of TUSDECRole of TUSDEC Intervene to Upgrade Technology and skills in key SMEIntervene to Upgrade Technology and skills in key SME

Industrial clustersIndustrial clusters

Common facility centres / Skill development centres /Common facility centres / Skill development centres /technicaltechnical upgradationupgradation centrescentres

Demand drivenDemand driven

All to be managed by the private stakeholders of eachAll to be managed by the private stakeholders of eachparticular clusterparticular cluster

1717


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Focus on SME SectorFocus on SME Sector

Formation of Strategy Working GroupsFormation of Strategy Working Groups

((SWOGsSWOGs))

99SWOGS bring together the Industrial ClusterSWOGS bring together the Industrial Cluster

on a common platform and all relevanton a common platform and all relevant

Ministries and Provincial Governments whichMinistries and Provincial Governments which

impact on that sectorimpact on that sector

Foreign experts brought in with help of US A.I.DForeign experts brought in with help of US A.I.D

Pilot new projects with Holistic approachPilot new projects with Holistic approach

zz Island of ExcellenceIsland of Excellence strategystrategy

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Focus on SME SectorFocus on SME Sector

Priority SectorsPriority Sectors

PhasePhase II

Action Plan readyAction Plan ready

by 15by 15thth MayMay 0505

99Gem & JewelleryGem & Jewellery

99Marble and GraniteMarble and Granite

99Dairy

PhasePhase IIII

Action plan by 15Action plan by 15thth

AugustAugust 0505

99FansFans

99Sports GoodsSports Goods

99SurgicalSurgical

99FisheriesFisheries

99Furniture

Dairy

Furniture

1919Focus on Knowledge Based SMEFocus on Knowledge Based SME


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1919Focus on Knowledge Based SMEFocus on Knowledge Based SME

EntrepreneurshipEntrepreneurshipEnterprise Competitiveness Support FundEnterprise Competitiveness Support Fund

Objective:Objective:

To upgrade the competitiveness of PakistaniTo upgrade the competitiveness of PakistaniIndustry to respond to the new challenges andIndustry to respond to the new challenges andopportunities in the knowledge based and highopportunities in the knowledge based and high

tech economytech economyActivities proposedActivities proposed

99Venture CapitalVenture Capital99Business Incubators in collaboration withBusiness Incubators in collaboration with

UniversitiesUniversities

99Enterprise development fundEnterprise development fund MatchMatch--making grantsmaking grants yy Credit guaranteeCredit guarantee yy Equity financingEquity financing


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Reducing Cost of Doing BusinessReducing Cost of Doing Business

The Unemployment challengeThe Unemployment challenge

99Lopsided job creationLopsided job creation

99Lahore, Karachi, Faisalabad and the Central PunjabLahore, Karachi, Faisalabad and the Central PunjabEngineering triangleEngineering triangle

99Entire rural hinterland of Sindh and Punjab missingEntire rural hinterland of Sindh and Punjab missing

outout

99Balochistan Province and large parts of NWFP alsoBalochistan Province and large parts of NWFP also

missing outmissing outMust evolve strategy of successful IndustrialMust evolve strategy of successful Industrial

Parks in rural areasParks in rural areas


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ChallengesChallenges

2323

C


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The Main ChallengeThe Main Challenge

If we are to follow the path of rapidIf we are to follow the path of rapid

industrialization and take Manufacturingindustrialization and take Manufacturing

share of GDP from 18% to 30% thenshare of GDP from 18% to 30% then

99Every Ministry involved and ProvincialEvery Ministry involved and Provincial

governments have to work with a singlegovernments have to work with a single--

minded, focussed visionminded, focussed vision

99A new Institutional framework has to beA new Institutional framework has to be

developed which dovetails with the world as itdeveloped which dovetails with the world as it

is todayis today

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Ministries that Impact IndustrializationMinistries that Impact Industrialization

MOIP&SIMOIP&SI

Petroleum / Water and PowerPetroleum / Water and Power

Science and Tech / Higher EducationScience and Tech / Higher Education

LabourLabour

EducationEducation Federal and ProvincialFederal and Provincial

CommerceCommerce

Communication / Ports and Shipping / RailwaysCommunication / Ports and Shipping / Railways

Finance / State Bank of PakistanFinance / State Bank of Pakistan

ProvincesProvinces

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F t Ch llF t Ch ll


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Future ChallengesFuture Challenges

EnergyEnergy

Most critical for IndustrialisationMost critical for Industrialisation

99Plentiful energy required at most efficient possiblePlentiful energy required at most efficient possibleprice.price.

LabourLabourSimplifying the complex web of regulation.Simplifying the complex web of regulation.

Enhancing Labour SkillsEnhancing Labour SkillsLabour WelfareLabour Welfare

EducationEducationRaising basic education levelsRaising basic education levels

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F t Ch llF t Ch ll


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Transport SectorTransport Sector

An efficient, secure and costAn efficient, secure and cost--effective logisticseffective logistics

chain, Northchain, North--South through Pakistan isSouth through Pakistan isessentialessential

99Target 48 hrs from Peshawar to KarachiTarget 48 hrs from Peshawar to Karachi

99Increase Railway for FreightIncrease Railway for Freight

Port PerformancePort Performance

99Reduce Container dwell time from 12 to 4 daysReduce Container dwell time from 12 to 4 daysScience and TechnologyScience and Technology

Institutions which set Standards for IndustryInstitutions which set Standards for Industrymust have Industry focusmust have Industry focus

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F t Ch llF t Ch ll


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Provincial GovernanceProvincial Governance

Labour regulationLabour regulationInspection regimesInspection regimes

Skill trainingSkill training

LivabilityLivability of Citiesof CitiesLaw and OrderLaw and Order

Land Record problemsLand Record problems


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Thank YouThank You

session viii jahangir

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