Developing the Enterprise

Development of Industrial sector is Panacea for the ailing economies of the world. Owing to the fact that every country today is caught in this quagmire recession, amiable business environment, reduction in taxes, cheap factors of production, neoteric technology, availability of capital, lesser trade and fiscal deficits, propitious friendly conditions are some factors that can bolster dwindling economies of the world.

Industrial sector of Pakistan is severely maimed and requires immediate steps by government to outdo ongoing Global crunch. The stats say that today Pakistan has 3.3 million economic establishments comprising of 90% sole proprietorships, 2% Partnerships, 8% Corporations. Out of 3.3 million establishments, 95% employ less than 5 workers, 4% employ between 6-50 workers, 1% more than 50 workers insinuating that Pakistan has dearth of jobs. Currently, large part of our economy is dominated by 90% of small and medium enterprises (SME) contributing 30% to GDP and employing 78% of non agricultural workforce. Still, this sector is somewhat neglected by the listless attitude of our government. Moreover, 50% of the enterprises are in retail and wholesale and only 20% (660,000) of them are in manufacturing sector implying that Pakistan lags significantly in manufacturing industry. Older enterprises most of them in Sindh, being more lucrative then new enterprises all over the country also suggests that new enterprises lapse in technological advancement, which is one of the reason of their pitfall.

Pakistan’s government should develop industrial policy to foster our enfeebled economy and the very first step being development of its enterprises. Government should help SME’s built better linkages with transnational corporations and promote vendor industry to solve aforementioned conundrum. 
Wrote on March7,2009