Focus on engineering industry

Briefing the Industries and Production Minister, Jahangir Khan Tareen, on November 10, on the performance of the Engineering Sector during recent years, the Engineering Development Board Chief Executive Officer, Imtiaz Ali Rastgar, is reported to have made a pointed reference to the increase registered in the share of the engineering sector in the country's total exports to 5 percent in FY 2004-05, from 3 percent in the previous year.
Elaborating on this, he pointed out that the sector's exports of engineering goods totalled $713 million in FY 2004-05 as against $394 million recorded in the preceding year.
The EDB chief seems to have been inclined to drive home the point that progress on the export front had been of a sustained nature. For, he quoted export figures, beginning with 2000-01, when it stood at $232 million, as progressively going up from $257 million in 2001-02, to $332 million in 2002-03. As for its performance during 2004-05, he said it was marked with optical, photography, cinematography and surgical equipment heading the list of top 10 items worth $184.87 million, followed by furniture and fittings worth $175.46 million; articles of iron and steel, worth $83.38 million, electrical machinery equipment, worth $82.15 million, and boilers and machinery worth $60.39 million.
As for the other export items he made special mention of tools, implements, cutlery, spare parts, vehicles, other than railway rolling stock, aluminium and its by-products, iron and steel, and copper and its by-products, all of them pointing to diversification.
As for the gains accruing from sustained development, he said that the US heads the list of the top 10 importing countries from Pakistan with $147.92 million, followed by Afghanistan with $93.05 million, the United Kingdom with $61.20 million, and Dubai with $40.08 million.
Of course, there can be no denying the substantial progress the engineering sector has lately achieved, thanks to the "Engineering Vision 2000". Basically, an objectively conceived comprehensive 10-year plan for a more vigorous pursuit of engineering goods manufacturing industry, with prime focus on its tremendous potential, which early planners of the economy, unfortunately, had failed to comprehend.
As for the earlier efforts, mention, among other measures, may specifically be made of the thrust on phased deletion of imported components, preferential purchase of local products by public sector entities and loan financing from the State Bank credit line.
However, it will be noted that while providing some boost to the domestic engineering industry, that approach still left a great deal to be desired in so far as development of its full potential is concerned. And the reason for this should not be too far to seek either. For from all indications, development in Pakistan had remained, essentially, an import-oriented pursuit, as a short-cut route to industrial advancement. Lacking in vision and will on the part of the past governments that approach failed to yield the desired result.
It will be noted that as a sequel to the imaginative and determined pursuit of boosting the engineering sector, it has started showing positive signs of recovery, not as much from use of props and incentives, but from the enlightened self-interest of the private enterprise.
For one thing it will be recalled that it was two years ago the EDB decided to phase out various industries enjoying protection from tariff concessions. Needless to point out, this decision was motivated by the comprehension of the challenges the engineering industry would have to face in the WTO regime, to compete in the international market from the dual thrust of high quality and attractively lower prices. Another encouraging aspect of the situation in the engineering sector was new investment of Rs 4 billion in the vendor industry in 2002 alone, thus helping create about 100,000 additional jobs.
This was evidently prompted by increase in demand, thereby enabling the units to work to capacity, the additional investment having gone into balancing, modernisation and replacement. But despite due focus on all segments of the engineering industry, it will be noted that machine-building part of it has remained rather unnecessarily ignored.
The textile industry is still largely dependent on imports for machinery and equipment. Needless to point, as such earliest possible development to the desired extent of the machine-building sub-sector is needed in view of the clearly foreseeable tough competition the textile industry will be facing in years to come.