Pakistan’s industry on the verge of collapse: A call for government support
PAKISTAN’S economy is facing a significant challenge due to the multiple factors affecting the industry. The Pakistani industry is facing various challenges, including the ban on imports, inflation and ongoing issues. These factors have significantly impacted the production capacity of the industry, leading to closures and layoffs. According to the latest statistics, production has decreased by an average of 65%, leaving only 35% of the industries operational. The decline in production has led to the closure of several units, leaving a significant number of employees unemployed. Industries that heavily depend on imported raw material are facing challenges due to the ban on imports. The non-availability of spare parts and essential equipment is causing hindrances in running the machines, ultimately impacting the production capacity. Consequently, it has led to closures and layoffs of the industries relying on imports.
Inflation is another major issue that has significantly impacted the industry. The rising costs of raw material, fuel and electricity have led to increased operating costs, making it difficult for manufacturers to keep their costs low and remain competitive. The increasing costs of electricity have added to the already increased operating costs as there is no tax rebate on electricity. This has made it expensive for the industry to run their machines which has added to the increasing operating costs. Regulatory issues are also hindering the export process, causing delays, missed deadlines, and lost business. Troubles and issues for exporters have become a significant obstacle for the industry to survive in the current economic climate. These issues have also led to a decline in exports, affecting the country’s overall economic situation.
These challenges have forced many industries to shut down specific units or halt operations, leaving many workers unemployed. Some industries are now considering shifting their focus to real estate or shutting down altogether. This trend has created concerns about the future of the economy and the country’s ability to attract foreign investment. In the light of these challenges, some investors have expressed regret over investing in Pakistan due to the current economic climate. The struggling industry has made it difficult for the country to attract foreign investment and the situation needs immediate attention and support from the government.
The government needs to take measures to support the industry and help it overcome these challenges. Supporting the industry can create employment opportunities, generate economic activity and improve the country’s overall economic situation. The government can support the industry by providing incentives such as tax breaks, rebates, and subsidies to encourage businesses to remain operational. The Pakistani industry is currently facing multiple challenges, leading to closures and layoffs. The industry needs urgent attention and support from the government to prevent the closure of more businesses and further layoffs. The government needs to take measures to support the industry, create employment opportunities and generate economic activity to improve the country’s overall economic situation.
—The writer is Deputy Assistant Director, National University of Technology Islamabad.
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