Speaking more like the Oracle than as the minister for industries and production which he is, Mr Liaquat Jatoi last week predicted the increase in industrial growth in this fiscal year would be 24-25 per cent over 17 per cent last year.

A few days later the ministry reported to the Economic Committee of the Cabinet that the increase in industrial production last year was 18.1 per cent, which is a record output for a long time, if not for ever.

But on May 30 last the APP had reported, quoting the ministry figures, that the increase in production of 39 major industries in the first ten months of last year was 10.70 per cent, with cars and jeeps contributing to a 62.12 per cent increase.

How are we having these leaping figures of production which are revised so quickly? Is it the result of some kind of a competition among the ministers in charge of the economy to outshine each other? Clearly there is a credibility gap.

To begin with, how can the minister predict the whole year's performance before the first two months of the year are complete? He has not come up with the break-up of the total figure, showing which sector of the industry would make how much progress. But we are told how the 7.2 per cent economic growth of 2002-03 became 18.8 percent growth in the following year.

The ECC was told automobile production last year increased by 50.6 per cent, electrical goods by 53.6 per cent, pharmaceuticals by 20.9 per cent, non-metallic and mineral products by 19.4 per cent and leather goods by 31.7 per cent.

The increase in textile production was only 5.7 per cent, while we would expect the increase in textile and apparel output to be far more in view of the investment of $3 billion in the largest industry of Pakistan in recent years in anticipation of the end of the textile quota around the world by the end of this year.

And that means we had the highest increase in industrial production with the largest industry contributing very little. The leather productions, with 31.7 per cent increase in output, appears to have done far better after under-performing for too long.

Industrial production over the years has been subject to violent fluctuation. The average increase in production in the 1960s, the era of industrialisation with textile, sugar and cement mills coming up, was 9.9 per cent.

In the 1970s following the nationalisation policy of the Pakistan People Party the average growth came to 5.5 per cent per year; in the 1980s the average growth was 8.2 per cent and in the 1990s it came down to 4.8 per cent the lowest in the decade.

The year-to-year fluctuation in some years was even more violent. Industrial growth in 1996-97 was 0.1 per cent and the next year it was 6.9 per cent. The growth was 1.5 per cent in 1999-00 and 9.3 per cent in the following year.

When a large part of the industrial growth depends, as in the textile and sugar industry, on weather and water, and availability of raw materials, such fluctuations are inevitable.

Even now in spite of the record growth of 18.1 per cent achieved and 24.25 per cent growth projected for the current year, the soaring world oil price, uncertainties of the weather and water, and the threat to the exports due to global uncertainties, can bring the growth rate down substantially.

When Mr. Liaquat Jatoi addressed the Experts Advisory Cells of the ministry of industries on the WTO and its impact on Pakistan he came up with several reasons why the industrial production in Pakistan is low and subject to fluctuations.

He spoke of the varied inefficiency of the industries in a highly competitive world where they have to produce high quality goods at low prices. He mentioned the high business cost, including the cost of production. Power is too costly and water is scarce and the industries have to pay a high price for that.

He did not mention the corruption which inflates the cost of doing business in the country. Add to that, the cost of security of the owners and senior staff of the industry in the factory, at home, and as they move around. That is not a small cost.

The other deterrent is lack of access to finance. Industrialist complain that while short term finance, including for trading, is available from banks long term finance for setting up of industries is not available.

Banks ask the investors to approach the investment banks for long term capital, while the investment banks talk of their small resources and bad experience of the past. And it is not every capitalist who can raise capital through the stock exchanges.

Mr Jatoi also mentioned as a significant deterrent absence of linkages with regional and international production networks. That is a major handicap. Yet another handicap is the low level of skills and inadequate training facilities for human resource development.

Dozens of business schools are coming up every year with their high fees, but few institutes to train mechanics and other skilled persons to man the factories. Mr. Jatoi wants the business community to understand and become a part of the emerging global trading system that advocates a transparent and rule-based trading system.

A recent meeting of the chairman of the public sector corporations presided over by Mr Jatoi decided to frame a training policy to produce skilled persons to meet the global economic and trade challenges. Japan has also given financial assistance to set up 26 training institutes in the four provinces and the project is to start soon.

Mr. Jatoi has also directed the ministry of industries to draft a national industrial policy covering all potential sectors for foreign and domestic investment within two months.

But four months have already passed since that directive was given to a committee headed by the secretary of the ministry of industries; but no policy has come to light.

Before the policy comes out efforts are being made to set up textile city in the Port Qasim area in Karachi and Sundar near Lahore. And Faisalabad may have its turn soon. Mr Jatoi says the Karachi textile city will provide 80,000 jobs.

While the automobile industry has increased its production by 50 percent last year that is not adequate to the needs of the country. Thanks to liberal lease finance from banks and attractive interest rates, the demand for cars has been increasing steadily and there is a high premium on delivery of the cars on the spot, which is resented by the buyers.

Industry is the largest source of revenue to the government, central and provincial. It is a source of employment, and it brings the value added to the exports. But care has to be taken to prevent industry from adding to the pollution in the country and making waste disposal a major problem.

Mr. Jatoi as industries ministers came up with many attractive proposals. Some of them are too good to believe. And they take a long time to materialise; or what becomes a reality is only a shadow of the original proposal.

May be with Mr. Shaukat Aziz as the prime minister, industries will receive the importance that is due to them to enrich the country and take economy to new heights of development. And that can bring in more foreign investors as well.