Why is Pakistan unable to develop a competitive-export focused industrial sector?

[Enigma SIG]

The core of the problem can be described as follows:

We at government level facilitate trading versus manufacturing
We at government level facilitate informal sector v/s formal sector.

True. Pakistan is beset with "Shaalmi" syndrome. Don't want to manufacture; just import and resell.

Plus; no work ethic in Pakistan's "educated" class; whether it be software professionals, or run of the mill MBA's / engineers.

Owners of major software houses have no work ethic too; they're running sweatshops with daily crunch time mode (working till 3 in the morning only to return at 9am sharp); and Saturday's turned on because ramzan hai kaam pura karna hai!

 

[Canuck786]

Because we like to spend more than we make and therefore we resort to cutting mandatory costs and thus jeopardize quality of product while keeping prices at a premium. That diminishes the potential of growth because International marketplace will not pay extra for a sub standard product. Basically our entrepreneurs behave like established brands and thus are beaten by smarter businesses who are able to offer better product at lower prices.

 

[Rusty]

I'm going to go a bit into the weeds here, but I think the problem starts in the family.

We don't allow any independence to our children, which does not allow them to build up self esteem or self worth. How many people have been stopped by their family from doing things they want? Heck, many don't even get to choose their husband/wife

We then codle our children and never allow them to feel any hardship, if you never feel hardship you never know how to persavere. So the first time these kids fail, they give up.

We don't teach our kids basic life skills, how many men can cook even a basic dish?

I am not saying these are the only factor, but in the modern world you need certain skills and we as a nation do not allow our chilren to develop these skills and that translates to our industriousness, or lack there of.

 

[Riz]

I invested 10 million in a small industry here in Pakistan, after 3 years of hard work im planning to sale every thing in half price and would not spend a single penny in this country again... Every one from DC to TMA peon are corrupt, there is no one in the town who tried to support me,
Lets suppose i invested in a modern automatic car wash service station, within two month u will surprise 30 automatic service stations visible in that small town or city, in result all investors would end up in loss
There is no price control policy running in this country... One of my friend who invested in a mineral water plant told me that he is selling 1.5 liter mineral water bottle in rs 20 to shop keepers because there are many many unregistered, fake competitors in the market who are working underground.. Due to them he is not in profit while the shop keepers are selling one 1.5 litter bottle in Rs. 60... They are earning in millions while he is just covering his expenses... He told me he is planning to leave pak and he will invest in UAE

 

[nahtanbob]

I invested 10 million in a small industry here in Pakistan, after 3 years of hard work im planning to sale every thing in half price and would not spend a single penny in this country again... Every one from DC to TMA peon are corrupt, there is no one in the town who tried to support me,
Lets suppose i invested in a modern automatic car wash service station, within two month u will surprise 30 automatic service stations visible in that small town or city, in result all investors would end up in loss
There is no price control policy running in this country... One of my friend who invested in a mineral water plant told me that he is selling 1.5 liter mineral water bottle in rs 20 to shop keepers because there are many many unregistered, fake competitors in the market who are working underground.. Due to them he is not in profit while the shop keepers are selling one 1.5 litter bottle in Rs. 60... They are earning in millions while he is just covering his expenses... He told me he is planning to leave pak and he will invest in UAE

what you are telling is that people lack the basic business ethics

 

[N.Siddiqui]

Export more people...no need for any industry???...short term viable solution.

Make the most of the demographic dividend, the population bulge/the unemployed millions, the increased birth rate, one of the highest in the world.

Export the blue collar job workers/semi skilled/skilled to the construction, oil sector to the Gulf and Middle east and elsewhere(Africa can be tapped)...they remit the most as their family members are in Pakistan.

So a 9 billion USD deficit in CAD can be met by sending a million(less/more) people across the globe...

Pakistan is quite successful in this diaspora earning, can earn 10 billion USD more with the current remittances at 21 billion USD...

 

[Enigma SIG]

Lets suppose i invested in a modern automatic car wash service station, within two month u will surprise 30 automatic service stations visible in that small town or city, in result all investors would end up in loss

TBH, free market economics work that way. But yes; the government should regulate business types by area.

He told me he is planning to leave pak and he will invest in UAE

Bad choice. Too much overhead. Many UAE businesses are under water right now.
IT is the way to go if you want to work in Pakistan. Rapidly growing sector (in both services and own products).

 

[Army research]

Bollocks. Tell me are Banglas lobourers living in better environment then Pakistan? But they seem to do well in garment industry where they have become world leaders. This is about culture of work. In Pakistan the atittude is pray to god five times, act pious and that is it. Fcuk hard work or honest work.

And the article pisses around, skirting the truth. In Pakistan all our industrialists are rent seekers. They are not real businessmen. They are shy of competition. if not how come they can only 'swim' inside Pakistan but drown outside?

The blame lies with government. It's time the government reduced or even got rid of import restrictions. That would suddenly open the domestic Pakistan market to real market forces and I reckon most of the rent seekers would be wiped out. A few like Sialkot sports industry would thrive as it is already competeting with the world. However after the rent seekers are wiped out it would create a tough enivironment where new breed of entrepeneurs would rise that would be fit to take on the world.

Otherwise nothing will change in Pakistan.

No one would have the balls in the gov to do this as many of the rent seekers form either the gov itself or the opposition of immortals and sugar mills

 

[Indus Pakistan]

No one would have the balls in the gov to do this as many of the rent seekers form either the gov itself or the opposition of immortals and sugar mills

Bingo. Which is why see the continous economic lethargy and suffering. The rent seekers like the Jews in the West have their paws in every party, media, institution to secure their vested interests.

 

[Dubious]

involve individual businesses to decide to pursue export-oriented businesses over their domestic-focused companies, which is easier said than done.

locals are more interested in getting the money on the spot than long term planning

 

[Indus Pakistan]

The Pakistani management and business owners are just as incompetent. They rarely invest in their own factories with new technologies and rarely invest in their human capital (workforce training) .

Because most have 200 million Pakistani captive market. It's not like those customers can buy from abroad. If they could they would be wiped out overnight.

 

[CrazyZ]

Bollocks. Tell me are Banglas lobourers living in better environment then Pakistan? But they seem to do well in garment industry where they have become world leaders. This is about culture of work. In Pakistan the atittude is pray to god five times, act pious and that is it. Fcuk hard work or honest work.

And the article pisses around, skirting the truth. In Pakistan all our industrialists are rent seekers. They are not real businessmen. They are shy of competition. if not how come they can only 'swim' inside Pakistan but drown outside?

The blame lies with government. It's time the government reduced or even got rid of import restrictions. That would suddenly open the domestic Pakistan market to real market forces and I reckon most of the rent seekers would be wiped out. A few like Sialkot sports industry would thrive as it is already competeting with the world. However after the rent seekers are wiped out it would create a tough enivironment where new breed of entrepeneurs would rise that would be fit to take on the world.

Otherwise nothing will change in Pakistan.

This is a problem with a the free market system. Business men in Pakistan may not accept the risk of exporting since they can make more money domestically with much less effort. Profits are reinvested in real estate domestically or abroad, not into expanding the business.

I think the problem is due to a combination of low financial literacy and risk aversion. How many Pakistani's understand how stock and bond markets work to raise capital? How to set up a private limited corporation to lower liabilities? How many will tolerate a complete loss? Not many, in my assessment.

Lets see how the East Asian economic model addressed these same issues and why it was so successful. State backed for profit firms like Toyota or Samsung had to follow the commands of government planners to push exports. They were indirectly controlled by the state and did what they were told. In exchange they were provided with loans and grants for factories on favorable terms. If they suffered a loss, the government would make them whole with continued backing (fear of loss and risk was lessened). Profits were reinvested into expanding the business or into research.....leading to continued growth.

This is the only path forward for Pakistan. Government must indirectly control and support for profit corporations. They must be directed to export. Profits must be reinvested in expanding the business or into research. You can not leave the system as is and expect a change by devaluing the currency. More direct action is required.