You have to understand the point here isn't to try and develop cars on our own.
The point is to prevent some foreign car manufacturer from selling cars to Pakistanis unless 70% of the value of that car is sourced from Pakistan. It's a strict market access rule that puts the country spending its money in the driver's seat with big investors.
So, if Toyota tells us, "well you should learn to make power tools, then talk cars," we can tell them to either show us how to make cars, or GTFO. With a 200 million market -- of which tens of millions can access hard or foreign currency via remittances --
someone will play by your rules to access your market. It might not be the Japanese, but perhaps the South Koreans or Chinese.
In the worst case scenario, you create incentive for the local market to develop its own solutions, which then necessitates domestic investment (which we lack) and the rise of local businesses. This is the hardest and longest route, but it generates most of the rewards in the long-run. However, in most cases, someone will crack and agree to your terms.
@JamD one thing I'd caution about the agriculture-to-manufacturing-to-services continuum is that it's actually investor-centric -- that viewpoint (ultimately) benefits the person trying to maximize ROI. That's why the US 1% pushed for outsourcing (to make manufacturing cheaper), but the US transitioning to a service-based economy hasn't been beneficial in microeconomic terms, and it's starting to impact human development in the US.
IMHO the 'balance' the Germans and French had achieved is likely closer to where we want Pakistan to wherein the
% output of your GDP favours services, but without causing decline in real agriculture and manufacturing output. Basically, you grow the economic pie with services, but you don't reduce your agriculture or manufacturing in real terms.
Let's say in 2021 Pakistan is $100 B (all fake numbers, just an example):
- 50% agriculture ($50B)
- 25% services ($25B)
- 25% manufacturing ($25B)
By 2031 you want to be at $200 B, but like this:
- 40% agriculture ($80 B)
- 30% manufacturing ($60 B)
- 30% services ($60 B)
By 2041 you want to be at $300 B:
- 30% agriculture ($90 B)
- 30% manufacturing $90 B)
- 40% services ($120 B)
Basically, all sectors should grow, it's just that the majority of your growth in the long-run could come from services. This is natural if your agriculture and manufacturing are also growing because those sectors need services. E.g., a car manufacturing plant will need an eco-system of retail, banking, education, real estate, etc.
One issue we have right now is that our services growth wasn't supported by manufacturing or agriculture growth, but by the injection of liquidity via aid (Musharraf-era) or loans (Nawaz Sharif-era).