KARACHI: Dr Kaiser Bengali called on Saturday for increased industrialisation, for which he suggested reactivation of the dormant Pakistan Industrial Development Corporation (PIDC) saying that the private sector had failed to achieve its target.

A former adviser to the governments of Sindh and Balochistan, Dr Bengali said the country’s economy was largely import-based, showing that the private sector had not succeeded in industrialisation. He was speaking on ‘Challenges to economy of Pakistan’ at a consultation meeting of the National Labour Council at the PILER Centre.

Dr Bengali said agriculture and industry were key pillars of Pakistan’s economy, yet the two sectors had registered just trifling growth in the past 25 years.

Dr Kaiser Bengali draws a dismal picture of growth in agriculture and industry in last 25 years

He said it was time to launch a socialist movement because the elitist rulers would not solve the people’s problems.

“Our population growth rate is 2.5 per cent and labour force increase rate is 3.5pc, thus, the GDP should grow more than 3.5pc per annum. If the GDP growth is less (than 3.5pc) that means per capita income is decreasing.”

Referring to his recent study on 25 years of Pakistani economy, Dr Bengali said there had been an average growth of just one per cent in four major crops — rice, wheat, sugar cane and cotton. The growth in crops of pulses, vegetables etc remained at 1.5pc — much less than the population growth rate.

‘Food shortages loom’

“The country may face a big crisis of food shortages in such a situation,” he said, adding that cotton was the crop on which Pakistan’s entire textile industry hinged, yet its production had also declined.

On an average, the overall growth of industry remained at 4pc in the past 25 years. He added that many local industries had closed down and imported goods had replaced local production.

He said furnace oil and high-speed diesel were major imported petroleum products, which were used in power generation and transport, respectively.

“If trains are used for goods transportation, fuel imports can be reduced drastically. Similarly, the use of furnace oil be reduced in power generation and replaced with local fuels. If imports are reduced dollar demand would decrease, which would stabilise the foreign currency exchange rate.”

‘WB employees sitting in govt’

He said the foreign direct investment (FDA) mostly came from China, but the Chinese companies sent back remittances in dollar. In fact, the FDA was a burden on Pakistani economy.

“Pakistan’s policies are not made for the benefit of Pakistanis, while, the bureaucracy is working for the benefit of rulers. The economic advisers are actually employees of the World Bank and they are still sitting in the government in various capacities.

“This economy has become casino economy, where only service sector is earning profits, while industries suffer heavy losses.”

He suggested reducing general sales tax (GST) on industries from 17pc to five per cent. “GST is essential for documentation of the economy. A ban [should] be imposed on import of consumer products.”

He said economic disparity had increased as the elite were spending excessively, whereas the poor did not find earning opportunities.

Dr Riaz Shaikh, head of social sciences at Shaheed Zulfikar Ali Bhutto Institute of Science and Technology, said the skilled labour force was not being developed in Pakistan.

“Labour force is working in precarious working conditions. Pakistan exported manpower to the Middle East, but such workers remained unskilled despite spending many years. Remittance money has actually turned Pakistan [into] a consumer society, where no industry is developed.” He said there was no innovation in industry and agriculture sectors.

Dr Shaikh said the country’s trade with neighbouring nations had declined.

“Our trade with India is less than $1 billion, while our trade with Afghanistan, which was over $2bn earlier, has now decreased to $300m.”

He said freedom of expression and assembly was under threat and the media was facing existential issues, where a large number of workers had been laid off.

Dr Shaikh said the state had no plan for long-term industrial revival, which was evident from the present government’s scheme to construct 500,000 houses for the revival of economy. “This housing project is a failed scheme. Mortgage economy has caused economic crises in the world. This failed model is now being tested in Pakistan.”

He said China had revived its economy through industries by setting them up with its surplus money. In Pakistan, there was no surplus wealth. “When a worker cannot receive the minimum wage, how can he buy a house worth millions?”

Journalist and rights activist Hussain Naqi said when foreign companies repatriated their money in dollars, they should be told to pay taxes in dollars.

Karamat Ali, executive director of the Pakistan Institute of Labour Education and Research, said out of 65 million workers only one per cent were registered.

Trade union leaders Khurshid Ahmed, Nasir Mansoor, Latif Nizamani, Sultan Khan and others also spoke.

Published in Dawn, December 23rd, 2018