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Revival of KP’s sick industry remains a mirage

Updated April 14, 2019

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A CLOSED unit in Peshawar Industrial Estate, Hayatabad. — Dawn
A CLOSED unit in Peshawar Industrial Estate, Hayatabad. — Dawn

More than 1, 000 industrial units are either sick or closed in Khyber Pakhtunkhwa since long owing to different reasons thus causing unemployment but the government is yet to implement its first-ever industrial policy announced in 2016, according to reports.

The new industrial policy envisages an enormous financial concessions, attractive investment incentives, infrastructural and services facilities as well as measures for equipping manpower with the required skills and promoting trade and industries.

In addition to rehabilitation of sick industrial units and focus on cheaper energy sources, the industrial policy also envisages setting up those industries, which have comparative cost advantage and markets that are based on local raw materials, skilled and semi-skilled labour and local and export markets.

The policy especially lays emphasis on creation of more jobs by facilitating small and medium enterprises to grow and flourish by providing business support services including necessary finances.

The government has also claimed to set up more special economic zones to attract local and foreign investors and improve infrastructural and services facilities in the existing industrial estates.

Most experts and industrialists believe that government has failed to implement its most trumpeted industrial policy drafted in 2016 during the first tenure of the ruling PTI.

One of the excuses of the previous PTI government in the province for not enforcing the policy was that the then federal government of PML-N was not cooperating with it on many fronts. Now PTI is in power both in the centre and the province but its so-called industrialists-friendly policy still remains just on papers and the industrialists, especially the owners of small units, continue to suffer.

The idea of attracting foreign investors to Khyber Pakhtunkhwa also remains a far-fetched mirage and the unemployment in the province is ever surging.

Zahid Khan Shinwari, former president of Sarhad Chamber of Commerce and Industry, told this scribe that KP industrial policy announced in 2016 by the then chief minister Pervez Khattak was a true reflection of the aspirations and demands of industrialists but unfortunately the government didn’t take even a single step to implement it.

He said that it was not the first industrial policy. The MMA government had also introduced an industrial policy draft in 2005 but shelved it up only to gather dust and it never saw the light of the day.

Mr Shinwari said it was pledged that under the policy the provincial government would grant sizeable concession on industrial loans and 25 per cent subsidy on purchase of land, transportation charges of machinery and electricity tariff for setting up new industries.

“We then thought we got what we had dreamt of because we were of the view that incentives and subsidies given to industrial estate in Gadoon should not have been withdrawn and local investors should be motivated to invest in KP instead of Punjab and Sindh or elsewhere in the country. With announcement of the industrial policy in 2016, the businessmen thought that they would take a new journey towards development and economic prosperity in the province but it proved just an eyewash,” said Mr Shinwari.

He said that 70 megawatts electricity was already available with KP that was supposed to be provided to industries at very cheap rate and without earning any profit on it but nothing of the sort happened so far since the policy had been announced.

The industrialist said no serious efforts were made by the successive governments to set up an industrial culture in the militancy-plagued province and motivate the local investors by providing facilities and incentives that it could neutralise negative effects including location disadvantage, transportation cost, skilled labour and related industries with production of raw stuff.

“If our local investors stand unmotivated and demoralised, how could one think of attracting foreign investors? Unless, both the federal and provincial governments brainstorm and put hands together, the issues regarding industrial change in the province will remain a dream and unemployment will increase. Recently, according to a media report, the education department in Mansehra received over 5,000 applications for 195 low grade posts in schools while the district and sessions judge received over 2,000 applications for filling six vacant posts of naib qasid and drivers. Among the applicants were graduates. One can imagine the gravity of the situation and unemployment in our province,” said Mr Shinwari.

Mohammed Ali Ozgen, head of Business Development and Media, KP Economic Zones Development and Management Company (KPEZDMC), when contacted, said that KP Revival of Sick Unit (RSU) had created 1,800 direct and indirect jobs through launching 70 new units and 400 jobs by revival of sick units. He said that efforts were underway to collect data of sick and closed units to provide facilities and necessary assistance to the owners.

He said that till then, the data of sick and closed units in the province reflected a figure up to 301 with further breakup detailing that around 67 units in Peshawar Industrial Estate, eight in Nowshera Industrial Estate, eight in Nowshera Export Processing Zone, 104 in Hattar Industrial Estate (Phase-1-IV), and 115 in Gadoon Industrial Estate were located.

He said that government was engaged with foreign investors at various levels to lure them to invest in the province that would enable it to create millions of jobs for the skilled and unskilled youth. In addition to it, he said, through advertisements in media, owners of the sick and closed units were invited to approach the RSU for the required assistance and guidance.

Mr Ozgen said that incentives were offered to investors, both local and foreign, to invest in Khyber Pakhtunkhwa owing to its improved law and order situation and a conducive environment under the already announced comprehensive industrial policy.

“New industrial estates are being explored and opened where abundant job opportunities would be generated for youth as envisioned by Prime Minister Imran Khan. KP will experience a visible change in terms of economic development and sustainable social betterment in the months to come,” he said.

Published in Dawn, April 14th, 2019