Daily Times

The long-lasting turmoil jolt to the Pakistani economy teaches several lessons and brings forth multiple reasons for its occurrence. One of these is that the Pakistani economy since its inception has been a consumer economy which gradually led to diverting our gaze to readily available materials for our consumption which capitalist economies furnished even by providing us costly loans and making us purchase their products with the same loans. Since its inception, for the last 75 years, Pakistan has been encouraging assembling of the finished products instead of manufacturing its needs. But now when the Pakistani economy is in ICU, we must introduce critical reforms.

Just a few of the reforms took place to placate the situation in the form of assembly plants to gradually and ultimately become a manufacturing economy that never materialized. This mode gave huge dividends to the already rich and they became oligarchs and tycoons but the condition of the precariousness became the lot of the masses. The successive democratic or dictatorial regimes failed to come up with any of the policies that could let us mint money via manufacturing procedures and deal with the world for our benefit.

Many economies in the world proved the point that by focusing more on production and manufacturing, not only developed, and progressed but also became the rich economies of the world. For example, Japan was destroyed hugely in World War 11 but emerged as a powerful economy because it followed the same principles. The same happened in the case of China. China is now termed the biggest supplier of multiple materials and goods in the world because it has become largely a manufacturing economy. Recently, countries like India and Bangladesh enforced the manufacturing and services economy and discouraged assembler and consumer activity. Consequently, these economies also made rapid strides in progress.

Luckily enough, Pakistan has made pretty good progress in the manufacturing of military hardware and equipment, which saved precious foreign exchange

Pakistan is a soil full of rich resources of all types along with the human capital of the best quality, but we have neither harnessed nor tapped either of the two. The country that must have been the breadbasket for the world is taking its begging bowl to the world repeatedly even in the 21st century. The reason is that we neither imported technologies to sell our finished products to the world nor stopped buying finished products from the world. Since colonial times we have persisted in the supply of raw materials if any were available to us and imported the finished and manufactured product from outside with the much-needed foreign exchange.

The time is ripe to take action to make our economy sustainable by first turning all assembling industry into a manufacturing industry and for future industry, we may, like Indians, force the Assemblers to transfer technology and ownership to the people of Pakistan after a certain number of years. Secondly, import machines and technology to produce and manufacture to earn foreign exchange. This must be followed in every area of business and trade. Even the human capital must be turned into a manufacturing force rather than an assembling force by training equipping them with much-needed skills.

Major overhauling is the need of the hour in the auto industry. Pakistan is manufacturing very little share of this industry. Suzuki, Toyota, Honda, and many other brands simply assemble the parts imported from the mother country. Even the Korean giant Kia does the same and none of these is forced to manufacture the auto parts in Pakistan, nor are they on the path of transferring technology to Pakistan. All these Assemblers have been making money and the precious foreign exchange has been constantly flowing out of the country. This Assembler’s mode of business and trade has never allowed the local auto industry to grow and compete with the foreign Assemblers.

Our Agricultural area is still a huge area to be invested in for such things. For example, the dairy and livestock industry can work wonderfully in this regard. The same is the case with the high-tech communications industry which may manufacture IT-related products to the maximum possible level. The transport industry must come next to produce the vehicle locally and the finished products may be sold the world. Pakistan produces fruit of the best kind of the world which, instead of selling it as material, can be converted as a processed and packed food material as per world standards. It can add a bulk of foreign exchange.

Luckily enough, Pakistan has made pretty good progress in the manufacturing of military hardware and equipment which saved precious foreign exchange and helped earn it from the world outside. Pakistan manufactures tanks, aeroplanes, and ships with the cooperation of friendly countries. The same model must be followed in other key areas of the Pakistani economy because it opens many doors for employment of the skilled labor. These measures will surely go a long way in promoting healthy trends in the Pakistani economy.

The writer is a professor of English at Government Emerson University, Multan. He can be reached at zeadogar@hotmail.com and Tweets at @Profzee