- Pakistan is poised to become a competitive industrial economy with bold reforms and action
Consider this: A young Karachi businesswoman aspires to start her own manufacturing firm. She possesses the skills, drive, and vision. But before she can realize her dream, she is trapped in cumbersome paperwork, fighting chronic power outages, and coping with runaway costs. Her tale is one of the many others who are spread throughout Pakistan and wish to advance the industrial growth of the nation but are instead confronted by a system that suppresses their talents.
Pakistan’s industrial sector has long been burdened by outdated policies, poor infrastructure, and an unskilled workforce for decades. As the nation tries to redefine its economic agenda, it is faced with a critical choice: remain on the same malfunctioning trajectory or adopt an industrial revolution that will stimulate innovation, generate employment, and enhance exports. A strong industrial backbone is not merely a wishful thinking exercise—it’s a prerequisite for continued national growth.
The most immediate problem for industrialists in Pakistan is the chronic energy crisis. Power outages cause factories to shut down regularly, and owners are left with no choice but to spend a fortune on backup generators or incur huge losses. Deliberately high tariffs and an unreliable supply render manufacturing impossible for most. Though renewable energy sources such as solar and wind are full of promise, their implementation is maddeningly slow, exposing industries to repeated interruptions and increasing operational costs.
Aside from energy insecurity, the industrial sector is also weighed down by an ineffective bureaucracy. Entrepreneurs and investors can spend a great deal of time courting a series of conflicting regulations, changing tax policies, and never-ending approval delays. Instead of facilitating enterprise, the bureaucracy helps discourage it, driving most firms into informality or closing them down. Not only does policy discontinuity and administrative incompetence discourage investment, but they also forestall the formation of new industrial enterprises.
Financial exclusion is another significant barrier, particularly to small and medium-scale enterprises (SMEs), which are essential drivers of industrial development. Such businesses have considerable problems with accessing bank credit because of high collateral requirements, excessive interest rates, and preference for lending to big companies. Without access to low-cost finance, many potential small-scale producers cannot develop or modernize, leading to stagnation and underutilization of industrial potential.
Another structural vulnerability is Pakistan’s excessive dependence on raw material imports. This dependence subjects industries to foreign price fluctuations, currency devaluation, and changes in trade policy. The absence of raw material self-sufficiency results in higher production costs and lower competitiveness in export markets. Though developing local supply chains and investing in raw material sectors may go a long way in softening this problem, unpunctual policy enforcement and absence of judicious investment still negate progress here.
At the same time, the human skills deficit in the labor pool further slows down industrial efficiency. With the technology-based nature of manufacturing today, there is a rising need for skilled technicians, engineers, and machine operators. Dishearteningly, vocational training schemes are antiquated, and institutions of higher learning do not generally incorporate curricula that conform to industry requirements. Consequently, industries employ under-skilled workers, sacrificing productivity, or turn to outsourcing, which generally incurs more expense. Under-investment in human capital not only represents a lost opportunity but a compelling weakness in Pakistan’s pursuit of industrial advancement.
In spite of these hurdles, Pakistan is poised to become a competitive industrial economy. The nation is endowed with huge resources, is geographically placed favorably, and possesses a big, young population. What is absent is an indisputable, long-term vision of industry and the political will to implement it. The energy crisis should be addressed with holistic planning in terms of sustainable sources, infrastructure upgraded to modern standards, and round-the-clock power supply to industries. This would not only save money but also provide level playing field output, which is critical to both domestic and overseas competitiveness.
At the same time, regulatory reform is needed. By streamlining rules, promoting transparency, and assuring policy consistency, the government can set an environment conducive to investment and industrial innovation. Institutions have to shift from being obstacles to enablers of business. Concurrently, SMEs require improved access to finance. Specialized loan schemes, reduced interest rates, and state-supported guarantees can enable small-scale producers to expand and meaningfully contribute to the economy.
Encouraging local production of raw materials will make supply chains resilient, lower external vulnerabilities, and promote a culture of self-sufficiency. The government should complement this shift through carefully targeted subsidies and technical support. Equally important is a national upskilling mission, which is a priority of utmost urgency. Collaborating with industries to develop appropriate training modules in automation, engineering, and digital tools will enable the workforce to meet the challenges of contemporary manufacturing.
Time is of the essence. Each day of doing nothing costs Pakistan in the form of forgone investment, jobs, and innovation. Changing industrial policy is not a bureaucratic task—it’s a national necessity. With an appropriate strategy, Pakistan can catalyze an industrial revival that speeds up growth, lessens poverty, and increases its global economic profile. An innovative industrial base can be the basis of an emerging, independent Pakistan. The vision is clear, the challenges are known—what is now required is the courage to act.
The writer is a student of School of Economics, Quaid-e-Azam University, Islamabad