According to newspaper reports, the manufacturing sector of the country is facing multifarious problems, including shortage of electricity, overlapping tax laws, labour issues and financial troubles. The share of industry in the gross domestic product of the country is declining day by day and some of the industrialists have already shifted their businesses from manufacturing to trade. Others are finding it easy to manufacture their products from China and other countries and market the same in Pakistan under their brand names.The situation is not different in case of multi-national companies which manufacture their brands abroad and market in Pakistan. The government officials who matter must pay attention to the dwindling industrial sector which is one of the major job providers in the country. The rising cost of production curtails profit margin, as a result, the factory owners keep the wages lower. Other manufacturers weigh options to leave the sector and start trading which is more comfortable, have less labour cost and electricity is not an issue.
Many industrial nations are shifting to heavy manufacturing side and want to rid of the small and medium-level industrial units. Pakistan can benefit from this type of situation. China is also converting from small industry to heavy industry and Pakistan can benefit from the shift. But it can be only possible when industry is given concession in the country. The trend of manufacturing-cum-trading is dangerous for the country in the long run as it will bring the industrial sector to its knees in a few years. According to economists, some of the Pakistani manufacturers find it easy to manufacture their brand of products from China, Indonesia and Vietnam at cheap rates to be sold in Pakistan as imported items. This not only enhance their profit margin, but also relieve them of the labour and electricity issues in Pakistan. Nevertheless, this option of business costs the country of the jobs and finance. This trend will also keep the foreign investors away from the country.
Pakistan has strong cottage industry and there is a need to facilitate small manufacturers to create jobs and spur business activities. How the country with poor infrastructure, energy shortage and complex tax system expects a huge foreign investment. The local investors are shifting their businesses abroad. A new world economic order is taking shape in which tax concessions and soft laws have important role to play. An open economy is the need of the hour as the concept of contained economy has failed. It is hoped the government will pay attention to this subject and will take steps to increase industrial output of the country.