Industrialisation to meet national needs -The Nation

Spread the word

The needs of the country have to be met through indigenous resources. Industrialisation has to be prioritisation combined with planned implementation—starting with the satisfaction of needs followed by import substitution and then finally exports. The priorities have to be clear. Most Asian Tigers that emerged followed this approach, with the land of the pure being an exception. China went into isolation to build from the ground up with massive efforts for human development. Once self-reliance was achieved and imports substituted it went for exports of surplus products. The recently launched Belt and Road Initiative (BRI) is part of this effort to earn foreign exchange by reaching the world’s markets. Our neighbour India followed a very strict plan of indigenisation and application of appropriate technologies. Procurements were linked with the Transfer of Technology (ToT). Import bills were slashed before exports were started. Basic industrialisation was taken very seriously. Steel mills were established to meet the basic needs of the nation.

 

The founding fathers of Pakistan laid down the basic structure for industrialisation and research. The discovery of Sui gas in 1952 was a big boost. Pilot-level production of steel using the Kalabagh iron deposits was also undertaken with German assistance. The Pakistan Ordinance Factory (POF) was built under the able guidance of engineer Khan Bahadur Hamid Ghani. He was then sent to build the Karachi Shipyard and Engineering Works (KSEW) from where he retired and settled in Karachi. Ayub Khan’s martial law in October 1958, changed the direction of the country. The focus shifted from nation to empire building. In the words of my friend Dr Kamal Monnoo, the economist it was ‘self-defeating industrialisation’. The Steel Mills project was shelved due to the import lobby. While the needs of the nation were ignored, incentives were provided for exports. Loans and permits were provided to the favourites together with a very corrupt-to-the-core ‘bonus voucher’ scheme under which foreign exchange exemptions were provided to exporters. Under and over invoicing became the order of the day to build overseas reserves by a selected few.

Pakistan continues to spend billions on imports with no TOT. I have repeatedly proposed that imports exceeding Rs 10 million should include transfer of needed consumables followed by replaceable parts and finally basic design. Waivers should only be granted in exceptional circumstances. A ratio of procurement to indigenisation (P/I) should be maintained by every ministry and regularly reviewed by the PM Secretariat. Certain vital areas of technological advancement have been totally ignored such as microelectronics, mining and biotechnology. There has to be a roadmap to cover both the basics as well as the essential high-tech areas. Self-reliance has to be understood and then planned, achieving commercial viability wherever possible. After the Islamic Revolution in Iran in 1979, the country had to suffer as Shah’s armaments were all grounded due to the non-availability of spares. The country then decided to pursue an aggressive self-reliance programme by polling in all their resources.

Big items on our import bill are: fuel, edible oil and tea. Both edible oil and tea can be produced locally to achieve self-sufficiency while some of the fuel needs can also be met by liquification and gasification of our huge coal deposits at Thar (175 billion tonnes). It took me fourteen long years to touch the ‘black gold’ at Thar as the impediments were unsurmountable. The Planning Commission, instead of funding appropriate research projects for exploitation of the deposit, started playing with untested technologies like Underground Coal Gasification (UCG) which resulted in the waste of time and resources. Again, the production of Synthetic Natural Gas (SNG) from coal is not being pursued despite the out-of-reach LNG (Liquified Natural Gas) that is being imported from Qatar at an unaffordable price. The PM has highlighted the need to increase exports which may come later, but right now we must look inwards to meet the needs of the nation as both China and India have done to cut their import bill. My late father always gave the example of Lawrencepur suiting, that was produced in the sixties near Hassanabdal while the nation needed to be covered with woollen ‘malatia’ in winters and cotton in summers; surely we could have waited for the suits for a few but we did not, leaving the nation at the mercy of the weather.