Importance of public and private industrial partnership in Pakistan
Definition of Industry:
Industry is generally define as a that is It is the process/method in which countries change itself from a generally agriculture society into located on the production of equipments and services. Since the Industrial reformation, industrialization has been considered as important part for a country’s faster growth. Those countries that totally depend upon on agriculture always remained unprivileged and undeveloped, on the other side, those nations that gave importance to industry progress so industry gain high percentage of growth to that countries. The progressive countries of the world, America, Germany, Great Britain, Japan, and Russia, gave importance or priority to industrialization on large scale. The benefits of technological change were pathway into agriculture. They established industries, that bring a revolution by automation in the agricultural sector. Those countries bring revaluation. Number of employment is increased by giving importance to industry.
History of Industrial Revolution
At the time of partition in 1947, Pakistan had insuffient industrial base. Since the partition, British government had taken many wrong decision during the division of assets. The Government of Pakistan has been utilizing all available domestic and external resources for rapid development of the manufacturing sector. The West Pakistan was set up in 1947. The west Pakistan was considered and delivered an expansive offer of horticultural, backwoods, and creature items. Previous East Pakistan was known as a principle merchant jute. In any case, there was not a solitary jute plant in the East Pakistan, cotton was delivered, yet the area had no enormous manufacturing plants to process and create it. There was no steel industry in Pakistan, while India had a solid modern base at the season of parcel. Out of 921 industrial units operating in the subcontinent, Pakistan got only 34 industries, four percent of the total industries. The others were located in India. The industries located in Pakistan’s share were relatively small and depend upon on native raw material. These industries involve sugar mills, cotton ginning factories, flour mills, rice mills, canning factories etc.
Public and Private Partnerships:
In terms of Gross domestic product, Pakistan is considered 2nd largest in term of economic in south Asia and ranks 6th as the most heavily populated country in the world, having total population of 188.924 million as of, in 2015.
Public Private Partnerships is a mutual effort of government, NGOs,and public and private sector, in the funding, management and operations to support education growth in Pakistan. Public Private Partnerships involve the financing, development, operation and maintenance of infrastructure by the private-sector which would otherwise have been provided by the public sector. Instead of the public sector obtaining a capital advantage and providing a public service, the private sector establish the asset through a dedicated standalone business usually designed, financed, built, maintained and operated by the private sector and then provide a service to the public sector consumer in return for payment that is linked to performance. So that public sector is able to change its efforts to serving other urgent social and economic want. A Public Private Partnerships may include an impartially joint speculation between GOP and the private sector.2
The private sector is the main producer of goods and services in the economy, the main subscriber to investment, and the largest employer .In Pakistan privatization experience is considered as being among the most successful in South Asia. Uncontrolled sectors i-e transport and logistics, water supply, sanitation, solid waste management, real estate and social sectors including education, healthcare and housing have yet to benefit from such a core. The private sector is the main producer of goods and services in the economy, the main subscriber to investment, and the largest employer .In Pakistan privatization experience is considered as being among the most successful in South Asia1. Public &Private Partnerships in Pakistan:
Pakistan Government, aware of the values of industrialization for rapid and fast growth. The Government should take steps for establishment of industries which produced raw material i-e jute, cotton, hide, and skins. The structure for the establishment of heavy industries was also to be developed. The Development Board was established in 1984. Financial force in different country have been important and creative and access to foundation and funding, far away from usual role of the Government as the only infrastructure service provider, to involve the skill full people and economic affairs of the private sector.
Currently, the government of Pakistan passed the PPPAuthority Bill in 2016, the reason or the aims to provide the compulsory supervisory and permissive environment for promoting Public Private Partnerships. With the help of Asian Development Bank the provincial governments of Punjab and the provincial governments Sindh are cultivated legal and governmental capacity in order to obtain framework of projects using the Public Private Partnerships approach. Many projects have been implemented at the federal and provincial stage with the power and transferring foundation sector being the most active. A large size of investment under the China Pakistan Economic Corridor program is picture for the development of energy infrastructure projects.
On the other side the energy projects will be start under the Independent Power Producer mode “Ministry of Planning, Development, and Reform “that may be consisted on the Build-Own-Operate and Build-Own-Operate-Transfer models.4
In many nations in the world, governments support the use of public-
private partnerships in a various sectors .A Public and private partnership arrangement occur where a government enlist in a long-term legal relationship with a private sector partner for the exertion of a public sector task, such as the arrangements of transport infrastructure.
basically, governments aim to indulge with the private sector in
order to close or reduce the gap between the required and actual range and volume of public services.3
In 1990s, policy was established by Pakistan and core for Public Private Partnership in the telecom and power fields.
During the Government Nawaz Sharif the industry proceed through major changes. As a piece of its privatization approach, the Legislature of Pakistan, has privatized 8 concrete plants since 1992. Because of privatization the SCCP lost its command over the costs of the bond and accordingly new concrete plants were built up under private segment. Now a day there are more than 28 cement plants in Pakistan which has installed capacity of over 19.5 million tonnes per annum(TPA).
Maple Leaf Cement Factory Limited is considered as country best industry. Basically it is form the Kohinoor Maple Leaf Group. Maple Leaf Cement was constructed in 1956, through a mutual cooperation of the government of Canada and the West Pakistan in Industrial Development Corporation. The factory situated at Daudkhel district Mianwali is considered as a the third largest cement factory in the country. It was obtained by the Kohinoor assemble in 1992, when the legislature of Pakistan privatized the industrial facility.
Maple Leaf cement factory iskanderabad, Mainwali
Finding and Discussion:
Problem faced by industrial sector:
Industrial sector of Pakistan facing sever condition in the last many years and had facing many problems that mainly effected the economy of Pakistan. Pakistan is still considered as under developed country. Having many natural resources, the country has been going through sever condition and facing major break down in the economy in Pakistan. Pakistan faced major challenges and problems that hitting the industrial sector and reduces growing power, energy crisis, high loan fee, authoritative bottlenecks, terrible administration, absence of institutional system, political wrangling and intensifying lawfulness circumstance.
Old Industrial Strategy :
It is a huge difficulty in the way of industrial progress. There was a trend of industrialization in the 1960s. The policy of Nationalization was choose in Bhutto’s time and Zia-ul- Haq choose the policy of Privatization. The shareholders are remain confused to make an investment in such situations.
Deficiency of Mineral Resources:
There is lack of mineral resources like oil, coal in Pakistan. These resources are crucial for industrial progress. Due to the shortage of mineral resources.
Shortage of Infrastructure:
The infrastructure for industrial development is compulsory for future progress. There is lack of infrastructure in Pakistan.
Shortage of Industrial Research:
Research work for the industrial sector is not satisfied, because deficiency of technical education, and there is a lack of technological universities in Pakistan. Various specialized and professional foundations in Pakistan is more than 1522 out of which 1140 are in people in general segment.
Lack of Education
In Pakistan lack of education is one of the most important factor.Invester did not know to how start or establish the industry due to lack of knowledge. Insufficient resources are available to start heavy projects. Lack of skilled, trained and educated labors.
Corruption is one of the biggest fault and badly affected the industrial sector of Pakistan. Corruption is considered as evil, and its ratio is still increasing day to day. It is found in government as well as private sector also. Due to corruption, uneducated and dishonest workers come forward and produce many issue that cause industrial underdevelopment. Pakistan is considered as 34th corrupt nations and 1st in South Asia.
Cultural disturbances in the country have reduce the production in the manufacturing sector. On other side, lack of raw material mainly has adverse effect on production. There are various caste systems in the country.
An extraordinary reason for industrial backwardness is political instability. Since the distribution, the political situation of Pakistan is not satisfactory. Governments and government policies have regular changes. Domestic and foreign investors feel threatened to invest due to political disadvantages. All these results are in industrial backwardness.
Inadequate Industrial Credit:
There is a lack of financial institutions in country, Which can provide credit services to industrialists according to their needs. The terms and conditions for credit supply are very tight
Problem Faced By Cement industry in Pakistan;
1. Problems which are affected cement industry today explained and issued by All Pakistan Cement Manufacturers Association. Due to lack of 8.24% in cement consolidation during 2010-11, alarm bells have increased to the country’s industry and planning compared to previous year.
2. Continuous losses to cement industry are very bad and might endanger the service of Rs132 billion in loans the industry owes to the banking sector.
3. Maple Leaf Cement Factory Ltd will issue a correct offer to mostly back a 7300tpd clinker creation line at Daud Khel in Iskanderabad, Mianwali, Pakistan.
4. Cost of transport is the main issue.
5. Lack of research and development.
6. Increased cost is the also main issue.