Prime Minister Shaukat Aziz has said that for the first time, large-scale manufacturing sector has grown 16 percent a year, "a trend that augurs well" for high growth during this fiscal year. While addressing the groundbreaking ceremony of new Honda Atlas motorcycle plant near Sheikhupura on Monday, he said the economy had performed strongly as real GDP growth rate of 6.4 percent was achieved during 2003-04.
Punjab Governor Khalid Maqbool and Minister for Industries Jahangir Khan Tareen were also present on the occasion.
The Prime Minister said that large-scale manufacturing sector was the star performer, showing an increase of 18.1 percent as compared to 8.7 percent of previous year. Nearly all sectors contributed to the growth but automobile, electronics, textiles and cement sectors clearly stood out, he added.
The agriculture sector, on the other hand, had a slower growth last year, declining to 2.6 percent from 4.1 percent in the previous year.
This was mainly due to pest attack on cotton crop and lower-than-expected wheat crop yield. Despite lower cotton and wheat numbers, the growth in rice and sugarcane helped achieve a positive overall growth. Both these crops achieved higher yields due to better water availability and increased credit disbursement, he maintained.
The Prime Minister said that the government "is committed to improving" agriculture yield, productivity and income.
The recently announced agriculture package envisages sustained prices and credit support to the farmers that should transform agriculture and the rural economy in the long run, he added.
Shaukat said it was imperative to avoid being just a market- or a consumer-economy. The growth of industry is a must to create more jobs and earn valuable foreign exchange. The government will provide an enabling environment for industry to grow and flourish, he said.
He said Pakistan produced 100,000 motorcycles and this year 500,000 motorcycles are expected to be produced.
"We need to manufacture for both local market and exports. We view Pakistan as a regional manufacturing hub covering South Asia, Middle East, Africa and Central Asia," he added.
With low interest rates and a steady exchange rate, he said, the economy has shown signs of growth and resilience in the face of ever-increasing geo-political challenges. Both trade and investment figures show growth, while excess capacity has largely been consumed in various sectors and capacity enhancements are currently being carried out in several sectors.
Textiles, engineering, electronics, cement and packaging are some of the examples, he pointed out.
"Obviously, oil and commodity prices may cause inflationary pressure, but this is a global challenge rather than a Pakistan-specific one. Since reducing unemployment and eradicating poverty are the main priorities of the present government, the decision to focus public sector investment towards infrastructure will give a boost to growth and development," he said.
He said that indigenisation programme under the auspices of the Engineering Development Board (EDB) was progressing well - 80 to 90 percent in tractors and motorcycles and 50 to 70 percent in cars.
It is the government policy to localise, as among other factors it is localisation, which leads to self-reliance.
Localisation particularly results in cost reduction, as is evident in the case of motorcycles and tractors, and saves the industry from international ups and downs of the economy as a whole, he said.
Shaukat said that auto industry is rightly known as 'mother of industries' as it feeds over 200 industries. Globally, 30 percent of total rubber, 15 percent of total steel and 10 percent of total plastics is consumed by the automobile industry.
In Pakistan, too, the auto industry had the highest growth rate among all the industries and contributed significantly to overall GDP growth and revenue generation, he added. Engineering industry on the whole, he said, has the government's focus.
In world trade, engineering contributes over 60 percent and the government is taking steps to provide necessary incentives for its rightful share in Pakistan.
"We want the auto industry to export, improve, and be competitive, and we will maintain consistency and continuity of policies. We do not believe in policy U-turns, as this disrupts investment flows and creates market dislocation. The WTO framework allows us enough flexibility for our industry to grow and develop even further," he said.
Earlier, Saquib Shirazi, CEO, Atlas Honda, in his address of welcome highlighted the contribution of Honda Atlas Company in the national economy.
He demanded protection from the government regarding consistency in the policies while saying that all the tasks given to automobile industry had been fulfilled. Now it is time to protect Pakistani auto industry for its bright future and any such agreement that could harm it should not be accommodated. "Short-term pain will come up with long-term gains," he said.