PEOPLE are generally given to take government generated economic statistics with a pinch of salt. It wouldn’t be a political party which would not call the numbers in the yearly ‘Economy Survey as ‘fudged’. So be it. But if one were to visit the industrial areas in Karachi today, one is bound to be amazed by the size and scale of construction of industrial units—a vast number of them, expansions under the BMR of existing units and others springing up as new ventures.

The current mid- year statistics, suggest a strong 16.1 per cent growth in large scale manufacturing sector in the country. A passing gaze as one travels through the industrial estate, would make the figure look accurate, if not modest. But perhaps the trust and initiative in the country’s industrial growth is fired more by the passion of the veterans in the sector, than by newcomers.

Prospective investors could be a little hesitant to let money flow into the industrial sector, for fear of its safety and adequate returns. But the old guards who have been through the thick and thin of the industrial development over the last quarter of the century, are looking afresh at the new opportunities. The veterans facilitated by the current policies of the government and eyeing the opportunities presented by the world market, appear to be pursuing industrialisation with renewed vigour.

Much has been said about the industrialists giving up production and shifting their interest to trading. But on visiting the industrial areas of Karachi, one is caught by pleasant surprise. The place is experiencing some sort of transformation. Construction material is found to be dumped on every other plot. Several freshly constructed buildings can be witnessed to have sprung up. Many old projects look to have been renovated and there is development work in progress virtually on every third plot. The trend is stronger in areas where textile related industry is located.

Infrastructure situation has not changed much but the look and the feel of these areas is different from what it was like, say, about a decade back. Some ten to fifteen years ago, for example the Sindh Industrial Trading Estate (SITE) in Karachi, the oldest and biggest industrial estate of the country with 3,000 plants, wore a comparatively dull look. There were large patches of unoccupied private land.

At that time, this scribe was told, that most major plants in the area were operational but the trend at the time was to go for fragmentation of the business activity. Especially in the textiles sector, in the name of specialization, people were discovering the virtues of contract system.

The vertically integrated modern textile units were thought to be ill-suited to our set of conditions. There was a big rush in value-added textile sector. Different processes of the textile made-ups business was contracted out to minimize the labour cost component and also to avoid rigors of complying with labour related laws and interaction with several government agencies that come packaged with these rules.

Those were also the times when industrialists of Karachi were fed up with law and order situation including ‘Bhatta culture”. Also frequent closures and strikes were disheartening. A few dispirited ones even shifted their factories and offices to other parts of the country. Several people pressed hard by the shrinking local market, downsized due to dumping by some friendly countries and rising costs, opted out of industry altogether and turned to trading. Many vacated buildings of such projects were rented out and sometimes used as warehouses.

However, there is not a single makeshift warehouse anymore in the Site area at least. Taking a cue from China many entrepreneurs are aiming to reap benefits of economies of scale through expansion and modernization. “Who would use such precious land for warehousing? Except for a few plots occupied illegally by certain elements all land in this area is utilized for housing industrial plants and allied services”, Mirza Ikhtiar Baig, Chairman Site Association confirmed the observation.

Prices of industrial plots in these areas have shot up to touch the vertical limits. Today one acre plot in Site area fetches a price of Rs500 million. In Korangi industrial area a plot of same size is said to cost Rs400 million. In these areas there is no land available and private plots bifurcated are priced too high for new comers.

“Today we are entering a new era of trade and commerce under WTO regime. We cannot afford any more to compromise on the quality as market out there is conscious and competitive”, says and exporter, who asked not to be named. He adds: “We can not also afford the luxury of time needed to deal with vendors and contractors in this huge cosmopolitan city. Therefore we prefer not only to produce under one roof but also reduce our dependence on crumbling government agencies for the provision of clean water and electricity. We prefer to generate our own electricity, purify our own water, etc. For us any disruption in production line could mean losing not only a buyer but also reputation. It all depends on affordability but direction certainly is to produce for the global market of the world class standards”, the exporter asserted.

Seasoned class of textile tycoons are reported to have invested billions in balancing and modernising (BMR) of their units. This scribe spotted many new projects such as Friendship Textiles, Al Abid Export, Fair Deal, Pak Denim, etc. in Site industrial area, all belonging to people and groups with established set-ups and proven track record.

“The impression that the manufacturing class of Pakistan is inefficient or irresponsible is not correct. The fact is that we work against many odds and are still managing to perform well. This is the class that contributes directly to the development by expanding the industrial base. It contributes major chunk in government revenues and lifts the entire economy in the process. Is it asking too much if we expect to be treated compassionately? Is it not fair if we demand the status we deserve at economic policy making forums?” asked the Chairman Site Association.

There is no denying the fact that despite all professed government support to the industrial classes, the management of even a single manufacturing unit in the country and society is no mean task. Besides professional challenges of ever increasing competition and race against time in technological spheres, the state of dilapidated infrastructure, high cost of non- dependable utilities and bureaucratic red-tapism add up to restrict the sector for tougher, motivated, focussed, patient and efficient individuals alone who of course are resourceful enough to take a plunge in a big way.

This, however, is not a very happy situation. Today the country is flushed with liquidity. There happens to be many more people with loads of money, not knowing what to do with their wealth. Key macro economic indicators such as unemployment and poverty rates along with inflation highlight the pressing need for a further expansion in the industrial base.

It is an irony that resources are available but they are not getting invested in sectors that promise optimum national returns. Among other factors it is important that a sizeable part of private liquid funds find their way into the manufacturing sector. Market forces on their own have not been able to divert funds to the desired sectors and areas.