PESHAWAR: To breathe new life into Pakistan’s manufacturing sector, experts suggest a strategic focus on reducing production costs. Drawing inspiration from China’s industrial prowess, where nearly 30% of GDP is attributed to the sector, the emphasis lies on integrating Pakistani industry into global value chains.
China’s success story revolves around providing affordable and uninterrupted electricity to manufacturing facilities, a practice that boosts its global competitiveness. Shahid Iqbal, Senior Research Analyst at the Ministry of Planning, underscores the challenges faced by Pakistan, particularly in the electricity sector where costs make up over 50% of production costs. He suggests adopting similar cost-effective manufacturing policies to enhance competitiveness of Pakistani products in both domestic and international markets.
China’s model, with a robust industrial sector supported by consistent and cost-effective electricity, serves as a benchmark. The contrast becomes more apparent as rising electricity costs in Pakistan lead to closures of steel plants and reduced operational capacity in the remaining ones. According to Shahid, current electricity prices are notably higher than those in key competitors like Vietnam and Bangladesh.
The suggested approach extends beyond electricity, emphasizing the need to reduce manufacturing costs through the adoption of contemporary technology. Shahid points out China’s success in advancing its industrial sector through cutting-edge technologies, indicating a potential path for Pakistan to follow in order to boost its manufacturing capabilities.
Experts believe that Pakistan has to learn from China’s successful model, not only in terms of cost-effective electricity supply but also through the adoption of modern technologies. It could pave the way for a more competitive Pakistani manufacturing sector on the global stage.
