Pakistan infrastructure and industry

Pakistan’s infrastructure is underused because the economic boom it was meant to trigger has never arrived. Over the past three years, the government has successfully staved off a balance-of-payments crisis, achieving some measure of macroeconomic stability.[3] At the time of partition in independence, much of the area Pakistan received had little development, while most developed areas came under the territory of India. Therefore, Pakistan had to work for the primary foundation of infrastructure. The comparatively poor infrastructural situation of Pakistan by international standards has a severe effect on the lives of people. For example, the electricity shortages, lack of proper water, and sanitation provisions have had devastating repercussions in Pakistan. Above all, the increase in population to an alarming level is making our problems worse. The Government of Pakistan and its people face an uphill battle against poor infrastructure. According to the World Economic Forum Survey (2006-07) of 125 countries, Pakistan ranked 67th in the basic infrastructure category. Historically, a continual imbalance between demand and supply of infrastructure facilities is seen. In The Global Competitiveness Report (GCR) 2012-2013, released by the World Economic Forum, Pakistan is graded among the bottom 20 of the 144 economies around the world. Pakistan lacks a long-term view of competitiveness in accordance with this report.[4]

Pakistan, which had almost no large industrial units at the time of partition in 1947, now has a fairly broad industrial base, and manufacturing accounts for about 17 percent of GDP. Cotton textile production is the single most important industry, accounting for about 19 percent of large-scale industrial employment. Cotton yarn, cotton cloth, made-up textiles, ready-made garments, and knitwear collectively accounted for nearly 60 percent of Pakistan's exports in 1999-2000. Other important industries are cement, vegetable oil, fertilizer, sugar, steel, machinery, tobacco, paper and paperboard, chemicals, and food processing. The government is attempting to diversify the country's industrial base and to increase the emphasis on export industries. Small-scale and cottage industries are numerically significant but account for a relatively small proportion of the GDP at about 6 percent. Small-scale industry includes facilities, which employ fewer than 50 workers, and cottage industries (industrial units in which the owner works and is aided by family members but employs no hired labor). In 1999, industrial production grew by 3.8 percent. [5]

Since the mid-1960s, the industrial sector has produced 19 to 25 percent of gross domestic product (GDP), accounting for 24.5 percent of GDP in 2004. Manufacturing and construction dominate the industrial sector, accounting for around 19 percent of GDP. Since the 1980s, approximately 17 to 20 percent of the working population has been employed in the industrial sector (25 percent in 2004), mostly in manufacturing and construction. Although the industrial base has diversified since independence, the production base depends heavily on textiles and sugar. Manufacturing output is therefore vulnerable to adverse weather conditions and fluctuations in international prices for cotton and sugar. Various liberalization reforms have been pursued since the early 1980s but have been hindered by substantial corruption, frequent raw material shortages, the government’s tendency to provide generous concessions to particular sectors (such as sugar refining and yarn spinning), and a burdensome tax structure that has helped promote the development of the informal economy.[6]