Need stressed for nurturing local industry to reduce import bill

Terming the import bill and unemployment as the biggest economic challenges of Pakistan, experts believe that nurturing local industry will help reduce import bill and generate more employment opportunities.
Citing the example of the local auto industry, Aamir Allawala, CEO Tecno Auto Glass Ltd., said local auto industry has already set some goals to be achieved by 2021 and one of the major goals is to have total employment of four million with increase in its contribution to GDP to 3.8 percent. Also, the industry plans to contribute to manufacturing sector up to 30% by the same year while manufacturing 350,000 cars annually.
Referring to the Indonesian example, he said it shows that as GDP per capita rises, demand for vehicle also rises and Pakistan can easily replicate this example given the positive indicators. "The GDP of Indonesia was below $1500 in 2007 and the demand for vehicles was around 400,000 while the GDP reached to $4120 in 2016 and the demand for cars also increased to around 1200,000," said Aamir, adding: "This example can easily be replicated here very successfully in Pakistan given the positive economic indicators along with supportive auto policy."
It is pertinent to mention here that the auto industry's current contribution to GDP is 2.3 percent while its contribution to the manufacturing sector is 22 percent. In 1995, the contribution of the auto industry to national economy was Rs 1 billion and now it was Rs 49 billion in 2018. Also, the auto industry here has direct employment of 300,000 people while the indirect employment stands at 2.4 million.
Aamir further said there are set goals under the new auto development policy and the local auto industry is positioned well to achieve them by 2021. He further said that given the incoming investment, Pakistan auto market is likely to cross 500,000 units mark before expected.
He added that the indicators for Pakistan are quite encouraging as according to reports the country's GDP per capita today is $1629 and average annual sales volumes of cars are 314,000 units.
According to Planning Commission, the country's GDP per capita will reach to $4200 by 2025 and the annual sales volumes of cars will touch the figure of 714,000 units.
"And these figures will be more than doubled by 2050 as Pakistan is being seen as the 16th largest economy by 2050 by PWC," said Aamir. He added that Pakistan's natural resources potential and CPEC are propelling Pakistan forward at a fast pace and CPEC Investment can place Pakistan as leading country in automotive market.
He said that a growing economy points to a bright future for the auto industry and auto industry is the backbone of any economy due to extensive forward and backward linkages.