BY

The Founder of Pakistan, being a practical man with a sure vision for the future, stressed the imperative need for transforming the nascent nation into a recognized industrial base. He was emphatic in his views that with a strong agriculture base, with a massive pool of capable workers and sincere entrepreneurs, and with a reservoir of minerals, crops, and natural resources, this country will soon embark on the road to industrialization.

On Freedom Day, the industrial scenario in Sindh was very dismal. There was one cement factory each in Karachi and Rohri. There were some cotton ginning units while some service industries were scattered here and there. The country had a long way to go, and Sindh, being the recipient of a huge inflow of migrants, refugees, and settlers, was primed to be the center of industrial activity. The initial period between 1950 and 1961 witnessed the initiation of industrial activity and this was given a needed boost by the outbreak of the Korean War. However, the emphasis was on consumer industries or import substitution industries. By 1955, according to a Ministry of Commerce Report published in 1956, there were 1433 units in Sindh. The period of the First Five Year Plan (1955-60) saw a growth of intermediate related industries, but at the same time, the capacity of the consumer goods industry exceeded real demand.

During this period, the steps towards industrialization were initiated. Sindh Industrial Trading Estate Limited (SITE Ltd) was activated to develop industrial estates in Sindh to facilitate private investment in the manufacturing sector. It established the following industrial estates between 1947 and 1952:

No Name of Estate Year of Establishment Area (acres)

1 SITE Karachi (Manghopir) 1947 4,460.00

2 SITE Hyderabad 1950 1,268.00

3 SITE Tando Adam 1952 150.00

In 1955, the Government of Pakistan set up the Pakistan Industrial Development Corporation (PIDC) to establish industrial units which were beyond the capacity of private sector either due to technical or financial reasons. The Government also established Development Financial Institutions, such as PICIC, NDFC, IDBP, and SBFC to meet the financial requirements of private sector and to be facilitators in the establishment of industries all over the country.

The period 1962-70 was a time of industrial boom. The average industrial growth rate was an impressive 12.30%, and during this era many industries with substantial investment were established. The following industrial estates were set up during this period:

No Name of Estate Year of Establishment Area (acres)

1 SITE Kotri 1962 1,876.00

2 SITE Sukkur 1963 1,060.00

3 SIE Sukkur 1963-64 110.00

4 SIE Larkana 1964-65 59.00

The rapid pace of industrialization initiated during the regime of President Ayub Khan came to an unceremonious hiatus when the government of Zulfiquar Ali Bhutto implemented the Economic Reforms Order 1972, under which there was massive nationalization of industries. The buoyant confidence of the industrialists and entrepreneurs was severely shaken and the private sector resorted to shifting its capital to external territories while investment in domestic industries came down drastically.

The caravan of industrial progress, which was universally acclaimed as exemplary, and which was the source of widespread emulation, was stranded in the desert of nationalization. The emphasis shifted towards a controlled industrial base, with the state owned enterprises becoming the dominant players in the industrial scene. Nearly seventy public sector corporations were created to handle the task of running and operating the taken-over industries and to carry on with the nationalization policies outlined in the relevant directives. The ensuing result was tremendous misuse of government funds, blatant waste of appropriated industries and corporations, and substantial increase in the corruption syndrome. All in all, the economic activity of the nation plummeted flagrantly, and the devastation and ruination of a major industrial segment of the country spelled disaster. The negative impact of the nationalization policy led to the country being relegated to the ranks of least developed nations, a stigma on the nation’s conscience and a blotch on the moral fabric of the country.

The adverse effects of the nationalization framework continued to dominate the industrial investment climate in the country and when pragmatic sense prevailed, with privatization being the latest buzzword, the nationalization policy was discontinued. The industrialists in the country were again considered as architects of the nation’s progress on the avenue of prosperity and development. This favorable change in governmental thinking gradually built up the confidence of both domestic and foreign investors, and the investment environment started basking in the sunshine of industrialization. By end 1990, there were 3556 industrial units in Sindh, out of which 2437 were in Karachi, 560 in Hyderabad, 380 in Sukkur, and 179 units in Larkana.

During 1978-90, the following industrial estates were established in Sindh:

No Name of Estate Year of Establishment Area (acres)

1 SITE North Karachi 1983 1,020.00

2 Nooriabad Industrial Estate 1983 16,500.00

3 SIE Dadu 1982-83 10.70

4 SIE Shikarpur 1982-85 36.00

5 SIE Khandkot 1984-85 14.40

6 SIE Hyderabad 1985-86 50.12

7 SIE Mirpurkhas 1985-86 51.21

8 SIE Badin 1985-86 30.20

9 SIE Sanghar 1985-86 45.00

10 SIE Nawabshah 1985-86 50.00

11 SIE Thatta 1986-87 50.00

This was the period of consolidation and emphasis on private sector as the major source of economic development. Among other factors, the import of machinery required for the following industries was exempted in part of full from custom duty:

1. Industries of national importance.
2. Industries located in less-developed areas.
3. Balancing of existing units of specific industries.

Other relevant incentives, like tax holiday, accelerated depreciation, and exemption from excise duty, were also given to the industry. Simplification of rules and removal of cumbersome procedures were decided. The trend was towards liberalization of the economy and for the waiving of many formalities.

The years from 1991 to the present saw the establishment of large industrial estates in Chunian in Punjab, and in Gadoon in NWFP. These were set up by provincial governments and provided with far-reaching and attractive incentives. At the same time, the concessions available for setting up of industrial units in Nooriabad, on the Super Highway, were wantonly withdrawn. The result was deep polarization, decline in industrial activity, and disillusionment with the successive governments. There was a visible increase in sick industries in Nooriabad, and this also triggered a lack of interest in setting up industrial units in other zones in the Province.

During this period, the following industrial estates were established.

No Name of Estate Year of Establishment Area (acres)

1 SIE Tando Adam 1991-92 13.05

2 SIE Gumbat 1991-92 15.00

3 SIE Rohri 1991-92 46.39

The estimated investment in manufacturing sector was Rs 40 billion, with the province-wise break-up:

Punjab : Rs 24 billion (60%)

Sindh : Rs 06 billion (15%)

NWFP : Rs 06 billion (15%)

Balochistan : Rs 04 billion (10%)

The number of industrial units set up in Sindh during the period 1989-97 is evidenced from the following chart: 

Year Number of large Number of small

scale industries scale industries

1989 18 x

1990 37 x

1991 22 x

1992 25 x

1993 42 41

1994 43 56

1995 32 02

1996 12 11

1997 22 x

Since 1995 and onwards, there has been a profound decline in setting up of industries while there has been a marked increase in the ranks of sick industries and those plants that have closed down. The number of sick industries escalated from 186 in 1981-82 to 247 in 1997. However, the conventional wisdom is that the actual numbers of sick and closed industries are far greater than the available statistics. What is more ominous is that even after the regular issuance of myriad relief packages, frequent outpouring of government assurances, and the consequential liberalization of global trade, there is hardly any significant increase in industrial activity nor is there any improvement in the investment regime. This is taking a precarious toll on the progress and prosperity of the citizens of the Land of Bhitai and the Home of Sarmast.

Sindh, which was assumed to take on the mantle of industrial movement and which was envisaged as the citadel of industrial activity, lost the vantage position due to varied reasons, some province specific, some general, and some discriminatory. The proliferation of industries in Karachi coupled with the hustle bustle of mercantile activity transformed the city into the melting pot of the country. The metropolis attracted migrant workers not only from the interior of Sindh, but also from the other provinces. At the same time, there was and has been a gigantic inflow of people from alien areas and this has ensued into a versatile, competitive, and functional pool of workers. The saturation of the industrial estates in Karachi, (SITE Manghopir, SITE North Karachi, Federal ‘B’ Area, Korangi, Landhi, and in West Wharf, Orangi, Husseinabad, etc) led to a planning of industrial zones in other parts of Sindh.

In 1983, a 16,500 acres industrial estate in Nooriabad was set up, ostensibly to ease off the pressure from Karachi and at the same time to make it an easier access for the people of interior Sindh. It commenced operation a year later and over 100 units were set up. Unfortunately, the step-motherly treatment afforded to this estate was evident from the fact that there was an overt hostile attitude by the Federal Government against it. There was a reversal mode in the investment climate and there was a dramatic rise in factory closures and massive retrenchments and layoffs of workers. 

The differential steps undertaken by the Federal Government were:

• Withdrawal of Tax Holiday to Nooriabad industries in March 1998.
• Withdrawal of Custom Duty exemption to Nooriabad in 1988-89.
• Provision of fiscal concessions to other industrial estates, such as, Gadoon in NWFP and Chunian in Punjab.
• Biased and discriminatory treatment of sanctioning authorities, including financial institutions, towards the industries to be set up in Sindh by potential investors.

Moreover, the few fiscal concessions that were decided by the government in the 80s were seldom notified and that too for very few industrial estates or regional locations. This discouraged potential investors and they could not avail these concessions. Inspite of the lack of industrial activity in Sindh, the policy makers continued to harp on to the notion that there was substantial industrial investment being considered and activated in Sindh. This incorrect picture clouded the thinking of the policy makers regarding the issuance of notifications of fiscal and other concessions. The outcome of all this was that only Nooriabad, Mirpurkhas, Kotri, and Sukkur industrial estates were notified for some benefits.

The recent years have observed a tense escalation in the worsening of the law and order situation, primarily in the urban areas of Sindh. This has dampened the inspirations of those investors who would have normally concentrated on increasing their industrial foundations. The incidences of car-jacking, kidnappings, dacoities, and extortion, have skyrocketed. There has been intense polarization on the basis of ethnic distinctiveness, provincial assertiveness, and religious interpretation. Sindh has succumbed to a medley of all three facets of differences and beliefs. The Province has also suffered due to the activities of terrorists and militants, and this has affected the rapid inflow of foreign direct investment into this place. Furthermore, the continued ethnic, sectarian, and parochial fighting which gathered up considerable steam severally affected the operation of industries in Sindh. In this way, the industrialists of Sindh could not favorably avail themselves of the benefits available under the Rural Industrial Development Incentives Scheme (RIDIS).

There has been a noticeable disinterested and discriminatory posture adopted by the relevant financial institutions in the approval of funds for new industrial projects in Sindh. There is a semblance of conspiracy in this attitude and it reeks of an pre-intentioned program to downgrade the industrialization process in the Province. The lack of positive concern on the part of the development financial institutions has thwarted the plans and programs of those investors who desired to establish industries in Sindh.

A fundamental deterrence in the industrialization process in the country has been the collection of Octroi by local bodies. However, for some macabre reason, this is a major retardation action in Sindh and it has hurt the industries very substantially, both in monetary terms and in the movement of their products. The perplexing Octroi system and the high-handedness of the Octroi collectors who blatantly resort to charging Octroi on higher and arbitrary rates have made it a very problematic affair for the industrialists. There is an well-entrenched mafia, consisting of contractors, politicians, and local bodies officials, who have hampered all proposals initiated by the government to bring forth definitive improvement in the Octroi regime. The continuation of the present unbridled Octroi system will have more serious and adverse impact on the industrial activity in the Province.

The industrialization process in Sindh has slowed down because of other varied reasons and problems. These multiple reasons have to be considered very pragmatically and there has to be a planned approach towards removing these bottlenecks, towards understanding the subtleties of the global industrialization procedure, and towards attacking these points of stalemate so as to achieve a purposeful impetus in the industrialization process.

A prime factor in the retardation of industrial activity has been the inconsistency in governmental policies. There has seldom been a recourse to bringing about a long term approach towards the proper and practical germination of governmental strategies and schemes. There has been frequent dependence on adhocism and on a more capricious ambience in the corridors of power. This has vitiated the industrial climate and has resulted in extensive heartburn among the industrial community since industrial ventures are generally based on long life planning and feasibility.

Another element is that the government machinery often resorts to retrospective application of its decisions and this procedure has been a cause of a lot of industrial planning going haywire. The manner in which SROs and other directives are regularly issued and the manner in which official missives are ambiguous or unclear are obvious examples of strangulation of industrial activity. All efforts to decentralize the involvement of government officials and all efforts to bring forth smooth sailing for industrialists in officialdom have been stymied. The use of extensive documents and heavy reliance on redundant paperwork has been anomalous pastimes for the bureaucracy.

There has always been a lot of political oratory regarding the provision of basic infrastructure to the populace and also for industrial purposes. Inspite of all these pledges and inspite of all these promises, the industries have always suffered tremendously due to this problem. The hi-falutin propaganda unleashed by the spin doctors regarding the inflow of major power projects has gradually fizzled out and the Independent Power Projects have felt the brunt of the Accountability Process undertaken by the Ehtesab Bureau. The power authority WAPDA, which supplies electricity to Sindh, and KESC, which supplies power to Karachi and its suburbs, are both corrupt juggernauts and are outright responsible for their inaction and lethargic approach in providing electricity connections to the genuine industrialists. The casual attitude towards power outages, towards transmission and distribution losses, and towards curbing the corruption monster, has devastated the industrial process and many units have resorted to installing private generators to supplement their power requirements or for use as prime power providers. The faulty telephone lines, the excessive bills, the deteriorating equipment, cables, and exchanges, have also affected proper and timely communication so imperatively needed by today’s industrialists. The gas companies are also not providing connections to those industries that want to install gas generators to provide electricity.

A very distressing point is the non-availability of reliable and authentic data regarding the installation of industrial capacity in the Province. The various chambers and the concerned government offices too lack proper information that is so vital for proper promotion and planning of industrial activity in Sindh. The haphazard and amateurish way in which data is presently compiled and consolidated is a grim reminder of the lackadaisical attitude of the chambers and government officials. The sad part is that the potential of the industrial units has never been seriously projected in the domestic context as well as with reference to the global markets.

Another matter, although not province-specific, is also the cause of declining industrial activity. The flagrant anomalies in the import policy, such as instances of duties on raw material, also affect the competitiveness of the industrial units in Sindh. The brazen misuse of Dry Ports in other provinces has been detrimental to the industrial importers of raw material and other inputs. At the same time, the exporters too suffer because they are unable to get their imported raw material at comparable prices because of the advantages enjoyed by those who can utilize the "favorable" facilities available to them in the Dry Ports in Lahore and Faisalabad.

At the same time, the procedure for allowing commercial importers to avail the facility of importing raw material exclusively for industrial usage has also affected the competitiveness of the industries and has been responsible for the introduction of sub-standard products in the market. The import of palm oil, an industrial raw material, is an example in point. The rationale for import policy demands that raw material essential for industrial use should not be allowed for import by commercial or general importers.

The provincial government had set up the Provincial Industrial Facilities Board under the chairmanship of the Chief Secretary with a mandate to meet regularly and to cut down the pompous red-tape prevalent in government departments and infrastructure providing corporations. However, there have never been periodic meetings and there have seldom been top notch representation by the concerned departments and corporations. The constraints on the time of the Chief Secretaries have also been hurdles in regular sittings of the Board. Efforts were made to activate Divisional Industrial Facilities Boards, but these too succumbed to the lack of concern by the Divisional Commissioners who were generally pre-occupied with other state duties. However, the government has established the Provincial Committee On Investment headed by the Chief Minister. It is to be seen whether the Province’s Chief Executive has the time to make this a multi-functional and capably-coordinated Board.

The industries have also suffered from the prudential regulations issued by the State Bank, and on the imposition of high markups and service charges by the financial institutions. These have been instrumental in the downslide of industrial production and putting industrial expansion programs in cold storage. The leasing and Modaraba companies, although more convenient lenders with emphasis on quick decisions, are nevertheless expensive modes of financing. The backlash against bank borrowers, a result of the recent highly publicized campaign against bank defaulters, has also had a negative impact on borrower credibility and ability.

The deterioration in the road network, the unreliability of the railways, and the exorbitant airline charges for cargo, are also impediments towards a smooth industrial system. The ideal manner for development of industrial estates is their proximity to the transport network. However, there has been scant attention paid to laying a web of an efficient communication system throughout the Province. This has deterred the entrepreneurs from setting up industries in the various industrial regions. Even in Karachi, the roads portray a dismal scene. The SITE Karachi, Korangi, Landhi, and Federal ‘B’ Area industrial estates are vivid examples of criminal negligence by the concerned authorities. The roads are in pathetic, abandoned, and devastating conditions. The industrialists have complained ad nauseam but the only effect has been cosmetic patchwork on some high usage roads. The situation in industrial estates in interior Sindh is utterly hopeless. There are still unpaved roads, there are still dilapidated roads, and there are still non-navigable roads. The railroads are loss-making ventures and recently, the government has embarked on a process to cease operating trains on high-loss routes. In interior Sindh, there is still heavy reliance on animal carts to transport products and raw material, especially cotton and sugar cane.

A very serious problem is the proliferation of smuggled items into the country. This has played havoc with the industrial base and this has also led to the closure of many industries and plants. Moreover, the easy availability of foreign products tends to bring about lower demand for domestic products. The government functionaries have adopted a carefree position regarding the smuggling regime and this has led to it becoming an albatross around the neck of local industries. The involvement of Custom personnel, the connivance of Border Security people, and the apathetic attitude of the political hierarchy, has been a boon for the smugglers. Thus there is now a well organized smuggling mafia combine who moves about its business without impunity and without fear. The sporadic opera of entrapment of smugglers and recovery of goods enacted by the concerned authorities is a feeble way to project their self proclaimed efficiency, but in reality is meant to hide their collusion or failure.

There is an imperative and immediate need to rationalize the thinking process of the policy makers with a view to accelerating the industrial activity in the Province. The burst of industrial activity may not be the only panacea available for the amelioration of the problems of the denizens of Sindh. Nevertheless, the survival of the Province depends a lot on making this place a stronghold of industrialization, once again. Over the past many years, there have been regularly submitted proposals, programs, and plans by the government hierarchy as well as by the representatives of the private sector. Somehow, there has always been a slower tempo in solving the various difficulties and handicaps faced by the industrialists and businessmen. The setting up of the Provincial Committee On Investment can be an effective vehicle to achieve the desired objectives. The beginning can be made by taking into consideration the province-specific reasons that have been instrumental in the retardation of industrial growth in Sindh. A serious effort in this direction will send the required positive signals that the provincial government means business and that it understands the needs of the investors, both present and potential. The PCOI should truly act as a one window operation, a concept frequently espoused by all those concerned with industrial activity.

The provincial government should endeavor to promulgate policies that have a longer tenure and that if they are to be amended, these should be for the better instead of being regressive in nature. It would be advisable to formulate policies that are standard for a minimum of ten years. There should be no abrupt changes in incentives offered or in the taxation structures. The Federal government should also be impressed upon to refrain from retrogressive or contrasting policies or decisions. If at all there is recourse to increase in taxes, than a simultaneous increase should also be effected for imports of foreign goods competitive to the domestic items in order to offset the repercussions on sales of the local industries.

Moreover, the policy makers should take into consideration, thru a detailed study, the comparative incentives, facilities, and concessions offered by governments in other provinces and in other comparable countries. It should be noted that there are major differences in the initial industrialization conditions, economic policies, socio-cultural environment, and the development level between the Asian Tiger countries and the South Asian countries like Pakistan. There is a need to learn from the East Asian countries and how they developed their industries and their economies. An important aspect is the location policy for industries. The government should systematically expand the industrial base from Karachi and move up to the north. The setting up of industries in remote localities where there is minimal infrastructure or where there are accessibility difficulties should be discouraged. There are examples available from the East Asian and African countries. The South Korean government set up an estate in Banweol to accommodate 1000 small to medium-sized industries. The project failed because of the problems mentioned above. Today, the estate is working, but it is because the small plots were consolidated into larger plant sites for mega corporations. The second case is of Lampang, Thailand. This industrial estate in the Northern Region also failed to take off, because the investors considered it too far away, even though it was only 23 kilometers away from Chiang Mai. The third example is of Tema, Ghana. The government zoned over 30 kilometers for an industrial base. This prestigious project was considered a short term blunder due to lack of interest shown by entrepreneurs, and today, less than half of the estate is occupied.

There is also a need to set up a high-powered industrial cost commission to undertake a comprehensive study of the economic costs, the taxation regime, the possibility of extensive research and development programming, and for the formulation of practical and suitable recommendations to accelerate the process of industrialization in Sindh. The commission should prepare a program to phase out those regulations and rules that have stifled the private sector initiative and have been instrumental in greatly adding to the operation costs of the industrial units. There must be massive reduction in the plethora of regulations and there must be awareness of the excessive cost of an over-sized, under-employed, and time-consuming bureaucracy.

The contentious issue of Octroi must be tackled rationally so that the industrialists are not burdened unjustly, and at the same time, the local bodies also have access to significant revenue for their activities. In the other three provinces, there are the incentives of Octroi, Export Tax, and Zila Tax exemptions on plant and machinery, raw materials, auxiliary materials, packaging materials, and finished goods, for any new industry above the cost of Rupees fifty million, upto a period of five years after start of production. This will not affect the revenue of the District Councils, etc, because this facility is for the sole purpose of attracting new industries which really do not form any part of the present revenue projections from Octroi, etc. Besides, once investment is captivated in the industrial sectors of the province, it will be a boon for the coffers of the Province, and also the government will start receiving tangible revenue after the expiry of the five year initial period. It is thus suggested that:

• Exemption of Octroi, Export Tax, and Zila Tax on plant and machinery, raw material, auxiliary material, packaging material, and finished goods, for any new industry above the cost of Rs 50 million for a period of five years after start of production.
• Exemption of Property Tax on installations for a period of five years from start of production.
• Exemption from payment of 2% Workers Welfare Fund for a period of five years from start of production.

The Government has completely wobbled in its approach towards controlling the unrestrained growth in smuggling. Any and all pleas to stop this danger fall on closed-minded ears. The smuggling barons have their influences safely lodged in the bureaucracy and the Parliament to worry about the hue and cry raised by the industrialists complaining for a ban of the notorious Afghan Transit Trade Agreement. The outrageous abuse of the Dry Ports facilities is well known and documented. The daily arrival of professional couriers from Dubai and Bangkok are solid sources of enormous supply of smuggled items. The provincial government has to take stringent measures to stem the overflow of smuggled goods into the Province. The goods should be confiscated and burned in widely publicized events so that they never find their way into the markets and the smugglers will be strongly discouraged.

There is a need for a fundamental change in the attitude of the financial institutions with respect to the availability of development finance and working capital for industries in Sindh. The aggravation in the law and order situation in urban Sindh coupled with a parochial preference for industries situated in the industrial estates in Punjab brought forth a re-thinking in the approving authorities in the development financial institutions.

There must be a positive realignment in the thinking process of the banks and other financial institutions. A substantial allocation of funds must be allocated for industrial expansion in Sindh. The Sindh government must consider the establishment of Sindh Industrial Financial Facilitation Authority (SIFFA), which should be a private/public board that can be an organization to assist the industrialists if they are having genuine difficulties in obtaining finances from the DFIs. This Board can be composed of retired bankers, chartered accountants, and economists, alongwith the Provincial Secretaries of Industries, Finance, and Planning & Development as members. The Board could meet once every month to tackle the problems of the industrialists and this authority could be given powers to facilitate the availability of loans and capital if the projects are found feasible and the investors have a solid track record.

At the same time, there is a need to rationalize the interest rates which are exorbitant and are a drawback in utilizing borrowed funds for setting up of industries or for expansion purposes. The high interest rates under the self-employment schemes have also made the youth shy away from applying for loans. Higher interest rates also lead most of the time towards defaulting on loans if the project has a marginal feasibility or if the project is a risk venture.

The vital importance of small and micro industries is evident from the fact that even in developed countries, these types of industries play a substantially important role in the economy of the country. There have been several measures taken to establish a web of small industries across the country. The Sindh government should ensure that the Federal Government proportionately deals out the funds received from external sources for the development of small and micro industries in the country. The special credit line allocated by IBRD, ADB, Dutch Fund, OPEC Fund, etc, are some of the instances. The State Bank of Pakistan continues to set mandatory targets on annual basis for commercial bank loans to small industries and these should also be channeled towards development of industries in the Province.

The recent efforts of the Nawaz Sharif government to invite investment on a massive scale in small industries, is evident from the establishment of a Small and Medium Enterprises Development Authority (headed by a representative from the private sector) and the clarion call for doubling of exports in two years, and it has intensified the crucial need to spread a web of small scale industries all over the country. The government has introduced self-employment schemes thru the banks to provide upto Rs 250 billion to the youth to set up their own businesses and industries.

The small scale industries help in generating meaningful employment at a lesser capital-to-worker ratio. They are comparatively easier to establish and can be family operated small ventures too. They are helpful in providing on-job-training to workers since the owners are more concerned with the output directly and are mostly working alongside their employees. The workers too learn the skills which many times are hereditary and are under the ages-old Ustad-Shagird syndrome. The unskilled youth can take maximum advantage of learning a workable skill in a small or micro enterprise.

The advantage of the small enterprise is that the overhead costs are much less as compared to a larger unit because the unit is primarily dependent on the entrepreneur and his very few employees who perform multifarious tasks among themselves. However, the industries may lack sophisticated machinery and equipment, and may adopt rudimentary processes that, in the long run, may not produce the high quality product that is essential in today’s competitive world. It is, therefore, imperative that a three-pronged strategy be developed for structural improvement of the small industries.

The following steps may be initiated:

1. The entrepreneurial skills of the small industry owners and the work skills of the employees need to be upgraded. These can be achieved by involvement of employer organizations such as trade associations or chambers, or workers organizations such as national labor federations, or government organizations such as Export Promotion Bureau or Sindh Small Industries Corporation, or foreign organizations such as International Labor Organization or Canadian International Development Agency, etc.
2. The introduction of modern methods and processes can be done by the active support of the suppliers of raw materials and machinery. These sources can also provide training to the workers thru workshops, field trips, multi-media presentations, or by a hands-on approach. Another approach is the utilization of the expertise of technical training institutes and organizations to achieve the objectives. In Sindh, the Skill Development Council, set up by Employers’ Federation of Pakistan, ILO, Government of Pakistan, and World Bank can play an effective role in targeting the small industries owners and workers.
3. The third way is by linkages with major producers thru sub-contracting. This will enable the small industrialists to produce goods on a defined guideline and specification, and at the same time, they could also avail the established quality control standards of the contracting organization. Moreover, the government should make a rule that atleast fifteen percent of all government purchases will be from small and micro industries.

The government should set in motion a program to ensure that any new unit set up in the Province is environmentally safe and compatible and that the unit will not resort to pollution or deterioration of the atmosphere. The Sindh EPA must be vigilant and strict in enforcing the standards, thru awareness programs, technical support, and proper inspection and control. It should be ensured that industries such as tanneries, dyeing and printing, carbon, cement, etc, are set up in designated zones or areas. Moreover, these industries must set up effluent treatment plants in their units so that the rivers and seas are not polluted. Most of these industries, alongwith beverage, oil and soap, and pharmaceutical industries, are heavy users of water and are dependent upon the ready availability of water supply to operate meaningfully. The policy makers must make proper plans for the supply of adequate water to these units.

There is a need to reintroduce Rural Industrial Development Incentives Scheme which was originally announced in 1990 by the Federal Government and under which the limits were defined for providing tax and duties concession for industrial estates set up in various zones. There are over thirty industrial estates set up in Sindh and many have not been able to reach optimal point because off the non-availability of incentives or because of the abrupt withdrawal of concessions, benefits, and incentives. There is an imperative need to redefine the RIDIS and to ensure that units based in the periphery of Karachi, especially those which are twenty kilometers from the city, are also beneficiaries of the program. This type of scheme is now more desired because of the lack of entrepreneurial activity in the Province. The Sindh administration should prevail upon the Federal government to restore the tax holiday under RIDIS and allow it for another five years.

The Districts of Khairpur, Shikarpur, Jacobabad, Larkana, Nausharo Feroze, Dadu, and suburban areas of Karachi and Hyderabad, be treated as special industrial zones and should be provided significant concessions for five years, such as:

• Zero Import Duty on machinery and spare parts.
• 50% rebate on Sales Tax at import stage.
• 50% rebate on Import License Fee at import stage.
• Zero rates for Income Tax, Property Tax, Professional Tax, and Capital Gains Tax.
• Exemption from EOBI, SESSI, Education Cess, and Worker Welfare Fund.
• Exemption from Fire Tax, Advertising Tax, Conservancy Tax, and Export Tax.
• Loans at attractive and reduced rates.
• Power, Gas, and Water at reduced rates.

This is a very contentious issue but is of prime importance if the Province is to be industrialized. The trader-based chambers have not played an effective role in propagating the establishment of industrial estates or have not been instrumental in highlighting the issues related to industry. At the same time, the majority of the members of chambers are importers or those that deal mostly in imported materials. There is a marked difference between them and the industrialists who are concerned with setting up and operating import-substitution enterprises. This matter can be fairly resolved if the provincial government in tandem with the industrial associations, such as Council of Karachi Industrial Associations, lobbies with Islamabad to execute the bifurcation of the chambers into Chamber of Industry and Chamber of Commerce. This will be a trailblazer in starting an effective industrial revolution in the Province.

The Province of Sindh is endowed with the blessings of nature and it has been the gateway to Pakistan. This Province has strong and hardworking people who are contributing towards the prosperity and welfare of not only Sindh but of the whole nation. The denizens of Sindh, who subscribe to the teachings of revered saints and holy personages, believe in peace, work diligently, respect moral values and ethics, and practice austerity in their work and lives. There are countless Sindhis who are unable to improve their quality of life because of the lack of employment opportunities, especially in areas proximate to their abodes. The years of feudal subjugation and the ages-old tradition of subservience have brought depravity and desolateness in many of the citizens. Their salvation lies in sincere and serious programs to alleviate their miseries and their sufferings. The impoverished and neglected people of Sindh yearn to better the future of their children, they long for opportunities to provide a decent meal for their kinfolk, and they seek an honest day’s emolument for an honest day’s work and not alms or charity.

The rapid and immediate industrialization of the Province will open new vistas for the people of Sindh. The rapid and immediate industrialization of the Province will usher in an era of prosperity, progress, and fortune for the people of Sindh. The rapid and immediate industrialization of the Province will result in it being a manufacturing citadel, a haven of bounty, and a source of freedom, for the people of Sindh.

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