KARACHI, Dec 22: A process of de-industrialization has set in in Sindh for the last two years, which has shrunk the services sector, eroded revenue generation capacity and pushed up unemployment in the province to alarming levels.

Official survey reports a negative industrial production growth of 5.66 per cent in Sindh during 99-00. It reports an insignificant growth of 2.64 per cent in 00-01 when national industrial production growth rate is claimed to be about 8 per cent. It is only 0.08 per cent in the first quarter (July- September 01) of this fiscal year. The recent report of State Bank of Pakistan on economic performance for the first quarter of this fiscal says the national industrial growth is five per cent plus.

With this negative growth trend, the industrial employment in July-September 01 is down by three per cent. During the last fiscal (00-01), industrial employment in Sindh was negative by almost 6 per cent.

The post September-11 period is reported to have seen an acceleration in the de-industrialization process in the province and there are fears of Karachi, Hyderabad and other cities and small towns being literally swarmed by the armies of unemployed young men and women.

Coupled with this industrial production slowdown, is the shrinking of services sector in the province mainly because of the closure of a large number of bank branches and shifting of private offices from Karachi.

The industrial slowdown has actually begun in 1998-99 when growth in Sindh was only a little more than 2 per cent. But then it was a part of the overall decline in industrial growth at the national level. A year ago in 1997-98 industrial production growth in Sindh was impressive at 7.71 per cent.

No notice has been taken of this decline in the industrial production at the federal or the provincial level. “The federal finance minister is obsessed with budget deficit and has no time to spare to monitor growth and that too in a province like Sindh,” a leader of the Karachi Chamber of Commerce and Industry remarked in a bitter tone.

“Budget deficit in 00-01 is 5.5 per cent and not 5.3 per cent as was claimed in the current year’s budget documents,” he reminded while stressing that neither the budget deficit is being narrowed down nor the growth is being achieved.

But then, the Sindh government too has remained a silent spectator to this industrial slowdown and has apparently not taken up the issue for serious discussion with the business leaders. “Industry is essentially a federal government subject,” a bureaucrat offered explanation. But he has no explanation when informed that there used to be a high powered Facilitation Board headed by the chief executive of the province. This Board was supposed to hold monthly meeting to consider specific complaints of the industry. There was another Committee headed by the Chief Secretary and included senior officials from the federal government agencies.

No one in the Sindh government is ready to provide answer as to when the last meeting of these committees was held.

A number of committees for revival of economic activities, for development in Karachi and privatisation are sitting idle.

Smuggling, cheap imports because of reduction in tariff, extension of sales tax, higher cost of electricity, a breakdown of physical infrastructure, lawlessness, which continues to grow in presence of police and rangers are the main factors being held responsible for industrial slowdown in Sindh.

The official survey reports more than 61 per cent reduction in the production of electric bulbs in the province during first quarter. Cheap imports of bulbs have affected local production.

Almost 43 per cent decline has been noted in jute products because the government has imposed heavy duty on import of raw material. A few jute factories have either closed down or working in partially.

Decline in production has been noted in cement, sewing machines, electric motors, soda ash and a variety of other products.

The official survey of industrial production and employment is done by the Sindh Bureau of Statistics every month. It collects information of 90 items manufactured in 30 selected large scale industries covering 465 industrial establishments in Sindh.