UNIDO 2020: Pakistan Industrial Output Lags Behind Peers in South Asia
Manufacturing in Pakistan lags behind Bangladesh, India and Sri Lanka in terms of manufacturing value added per capita as well as per capita exports of manufactured products, according to Competitive Industrial Performance Report 2020 released by United Nations Industrial Development Organization (UNIDO).
Pakistan's Competitive Industrial Performance. Source: UNIDO |
India's Competitive Industrial Performance. Source: UNIDO |
Bangladesh's Competitive Industrial Performance. Source: UNIDO |
China's Competitive Industrial Performance. Source: UNIDO |
Pakistan's Manufacturing Output Trend Since 2000. Source: World Bank |
Manufacturing industries are defined by the International Standard Industrial Classification (ISIC). Value added is the net output of a sector after adding up all outputs and subtracting intermediate inputs.
Pakistan Manufacturing Output Peer Ranking 2019. Source: World Bank |
Pakistan’s overall exports have continued to lag behind those of its South Asian counterparts since the early 1990s. Bangladesh’s exports have increased by 6.2 times compared to Pakistan’s, measured in terms of exports per capita, and that of India by 6.8 times, according to Princeton's Pakistani-American economist Atif Mian.
Pakistan's average economic growth of 5% a year has been faster than the global average since the 1960s, it has been slower than that that of its peers in East Asia. It has essentially been constrained by Pakistan recurring balance of payment (BOP) crises as explained by Thrilwal's Law. Pakistan has been forced to seek IMF bailouts 13 times in the last 70 years to deal with its BOP crises. This has happened in spite of the fact that remittances from overseas Pakistanis have grown 24X since year 2000. The best way for Pakistan to accelerate its growth beyond 5% is to boost its exports by investing in export-oriented manufacturing industries, and by incentivizing higher savings and investments.
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https://tribune.com.pk/story/2265823/motorcycle-production-booms-as-economy-recovers
Industry players expect production to increase around 800,000 units
The first quarter of the fiscal year 2021 is witnessing higher production of motorcycles as the economy recovers from the lockdown that had been imposed to contain the spread of Covid-19 pandemic.
“There is a boom in motorcycle industry of Pakistan,” said Association of Pakistan Motorcycle Assemblers (APMA) Chairman Muhammad Sabir Shaikh.
He added production of motorcycles will hopefully increase around 800,000 units after the current month ends.
Looking at the growing demand for the two-wheeler vehicle, Emerging Innovation - a bike manufacturing company - has set up a new production line for bikes called Revolt.
“We have set up the production plant with 99% deletion program; ie the company will use locally produced auto parts in the making of two-wheelers,” said the company’s country head Anwar Anees, adding, “The locally produced motorcycle will be 33% less costly with an increased fuel efficiency of 62-kilometre mileage.”
“Locally held research and development (R&D) for over two million markets with the aid of engineers from different local universities helped us achieve this efficiency,” said Anees.
Besides two-wheelers, demand for three-wheeler rickshaws and loaders has also increased due to which the company has applied for permission from the government to produce three-wheelers and hybrid electric bikes.
“It is commendable that new production lines are being set up,” said Provincial Minister for Industries and Trade Jam Ikramullah Dharijo. “New factories mean more jobs, which Pakistan is in dire need of at the moment.”
Bikes production in this venture may be the highest ever in the history of Pakistan, said Shaikh. “Sales of motorcycles are also breaking records.”
“However, motorcycles data reported by the media is not complete,” he highlighted.
He said that the data is mostly taken from Pakistan Automotive Manufacturers Association (PAMA), which has only five motorcycle producing members while around 40 companies are producing bikes in the country. Those companies are registered with the Engineering Development Board (EDB).
According to a report by EDB Electric Vehicle Policy 2020-25, two-wheelers and three-wheelers vehicles constitute a significant portion of Pakistan’s overall auto manufacturing.
A total of 2.8 million motor vehicles were produced locally during the fiscal year 2016-17, which increased to 3.22 million in 2017-18 with a little bit of decline recorded in 2018-19 to 2.86 million.
Out of 2.86 million vehicles manufactured in Pakistan, more than 2.4 million motorcycles were manufactured during the same period, said the report.
I think Pakistan lacks an overall industrial policy now... the kind of policy that drove Pakistan’s rapid industrial development in 1960s. By 1969, Pakistan’s manufactured exports were higher than the exports of Thailand, Malaysia and Indonesia combined. https://www.riazhaq.com/2014/06/civilian-democracy-vs-military.html
Pakistan needs to incentivize investment in manufacturing and export oriented industries to earn foreign exchange and grow the economy as Asian Tigers did and now Bangladesh is doing
Pakistan Lubricants Market size is forecast to reach $1.91 billion by 2025, after growing at a CAGR of 5% during 2020-2025. Lubricants create a thin film between the moving parts for enhancing the transfer of heat and reducing tension during the contact of parts. Due to which they are used for applications such as wear reduction, corrosion protection, and smooth operation of engine internals. Owing to the increasing use of lubricants in textile and automotive, the growth of the Pakistan Lubricants Market is expected to accelerate in the forecast era.
Engine Oil is extensively used in Pakistan Lubricants Market. Engine oil is crucial in the smooth running of engines, reducing fuel emissions, and increasing engine efficiency. Engine oils provide better lubrication, cleaner engine, effective cooling, protects from corrosion, and acts as a seal owing to which it is vastly preferred for various transportation modes. Engine oil helps to cut expensive maintenance for vehicle owners and also gives longer engine lifespan. Since, engine oils clean, cooling, and prevent corrosion of the engine, they save the engine from being clogged and damaged. Because of this, mechanical components last longer and corrode less, and engines, in turn, have a longer and safer lifespan. Also, by using good engine oil, there is a reduction in emissions and fuel consumption which anticipates enhancing the market in the forecast era.
Key sectors of lubricant growth: Engine oil, textile mills & wind turbines. Electric vehicles pose a challenge to lubricant growth.
Automotive Industry held the largest share in the Pakistan Lubricants Market in 2019and is projected to grow at a CAGR of 7% during the forecast period 2020-2025.
The textile industry uses lubricants such as greases, heat transfer fluids, gear oils, engine oils, transmission, and hydraulic fluids, and anti-static oils.
Wind-turbine lubricants play a critical role in equipment operation, maintenance, and reliability of a wind farm. New installations of a wind farm will drive up lubricant consumption for the initial fill of the wind farm.
The projects implemented under the China-Pakistan Economic Corridor (CPEC), a flagship project of the Belt and Road Initiative, will not only benefit certain areas but also development in Pakistan, commented China Radio International (CRI) Urdu on Sunday.
“The way in which the CPEC projects have been implemented over the past five years and the results that have emerged show that the purpose of building up CPEC is not to benefit certain areas, but to promote development in Pakistan,” the CRI Urdu said of the progress made in the construction of CPEC projects.
The Urdu service stated that the infrastructure, construction of industries and the elimination of energy shortages will provide an environment for Pakistan according to its resources, which will also benefit the people of Pakistan and guarantee a bright future.
The Orange Line Metro train in Lahore is the first electric public transport project, the introduction of which not only increased travel facilities for the people but also created new jobs.
In the past five years, CPEC projects have created 55,000 direct jobs in the road infrastructure sector, of which 48,000 have been created specifically for local Pakistanis.
According to a spokesman for the Chinese Ministry of Foreign Affairs, major projects with a direct investment of US $25 billion have been completed since the inception of CPEC. The projects completed under it are are part of The Belt and Road Initiative.
As for the shipping of cargo, the trade began at the Gwadar port during the first six months of this year, through which up to 20,000 tons of goods were shipped to Afghanistan; the initiative also created jobs in the shipping sector. There was no doubt that these projects entailed infrastructure as well as energy supply, and job opportunities, the CRI maintained.
According to the proposed two-gap model of economist Hollis B Channery, developing countries should introduce foreign investment and stimulate exports to boost their national economies. In this regard, CPEC has played an important role in the development of Pakistan.
The initiative has also addressed the issue of limited investment potential, insufficient foreign exchange savings and deficits in Pakistan, and has provided excellent quality for Pakistan’s economic growth.
Pakistan’s GDP growth rate is significant and it has created 70,000 jobs in Pakistan, the China-based Urdu service added.
Since its inception, CPEC has considered the elimination of energy shortages in Pakistan as an important sector for construction. Over a period of five years, energy projects under the CPEC framework added 3,340 MW of electricity to Pakistan in early April 2019, accounting for 11% of the installed capacity in the country.
The shortage of electricity has been significantly reduced and in addition to power generation projects, China has built the Matiari-Lahore (an 878 km long, 660 kV) HVDC transmission line project in Pakistan – the second HVDC transmission line in the world to extend the life of the country's power grid.
The construction of the corridor is progressing rapidly, significantly reducing Pakistan's energy problem in the process. Improvement in the transportation infrastructure has laid the foundation for the industrial development of Pakistan. The next phase of the project focuses on industrial cooperation.
Given the pace of the projects, their completion and results, it can be said that CPEC is undoubtedly a new impetus for the sustainable development of Pakistan, the CRI added.
“It is a bit ambitious target but it is possible to achieve this target due to the yearly growth in production as well as interest showed by different automobile companies from across the world especially from China which plans to invest in Pakistan,” he said while addressing Pakistan Automobile Industry Roundtable Seminar held at Pakistan Embassy, Beijing.
While addressing the participants, the ambassador said that a number of the Chinese companies are already in Pakistan in automobile manufacturing sector while up to 10 new companies have shown interest to invest in Pakistan and are in the process of having joint ventures with their local partners in the private sector. He informed that the government is formulating a new and very attractive automobile sector policy which will be announced soon, adding, more incentives and concessions in taxes are likely to be offered in the new policy.
Ambassador Haque said that automobile companies including manufacturers of energy vehicles from China will be invited to set up their plants both in the Greenfield and Brownfield sectors.
Giving details about the automobile sector in Pakistan, he said that the automobile is the fastest growing sector in Pakistan because of the large demand in view of the population which is close to 220 million people. In the past, the Japanese manufacturers had set up their production units but in recent times the Chinese automobile companies also started looking at the opportunities available in Pakistan.
https://www.unido.org/publications/international-yearbook-industrial-statistics
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