Industry

Industrial Estates & Special Industrial Zones

Why are they set up?

o To boost industrial development

o Attract investment

o Encourage entrepreneurs by offering them incentives

o Creating jobs

Pakistan’s first industrial estate is S.I.T.E. (Sindh Industrial Trading Estate Limited),
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Karachi was established in 1947
What is an Industrial Estate?
‘Areas reserved exclusively for various industries.’
o Infrastructure developed by the government
o Incentives offered to industrialists
o Private sector is encouraged to develop its own power plants
o Examples: S.I.T.E. (Karachi), Sundar Industrial Estate (Lahore)
Special Industrial Zones
o Same as industrial estates except the fact that investors are encouraged to develop
infrastructure facilities
o Examples: proposed zones along the motorway

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Advantages
o Large-scale employment

o Growth of industries

o Attraction of investors through a variety of incentives

o Improved quality due to competition between various owners of the same industries

o Potential for export if industrial production exceeds local needs

o Improved GDP and GNP

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Disadvantages
o Deforestation on large scale as a huge clear area is required

o Huge investment needed

o Pollution of different types on large scale

o Power shortage crisis

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Export Processing Zones (EPZ)
‘An industrial area where export-oriented industries are set
up.’

o EPZ are set up in different part of the country to promote the

setting up of industries to produce goods for export often
with the help of foreign investors

o The products produced are value-added or of high-quality

o Examples: EPZ at Landhi, Karachi is the most successful;

Gwadar; EPZs in Sambrial, Sialkot, Risalpur and Gujranwala
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Aims of setting up EPZs

o Boosting industrial activity

o Increasing export earnings

o Attracting investors

o Creating jobs

o Transferring Hi-Tech from the developed

countries like the US, Japan and the EU
countries

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 Government policies to attract investors to
develop industry
By giving them:

o Certain incentives such as tax exemptions on raw materials and machinery

o Simplified procedures of trade activities

o Public facilities, for example, metalled roads, water supply, electricity, etc.

o Dry port for fast and efficient functioning

o Refer to pg: 194 to read the incentives by EPZ.

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Government policies for industries
o Nationalization
Government buys all industries of a country

Advantages Disadvantages

– Resources are allocated properly – Less foreign investment

– More controlled management – Private business owners do not earn
– Generates more employment much money
– Harmful products cannot be – Less efficiency of production
produced – Less competition (no private
– Country became self-sufficient industries)
– Job security – Lower wages
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o Privatisation
Individual people owned businesses or industries

Advantages Disadvantages

– Owned by an individual so profit goes

to owner – Harmful products produced
– Self-managed – Main aim to earn profit
– Efficient business – Less job security
– Efficient quality – Less employment
– More competition – Tough working conditions for labour
– Freedom of choice – Monopoly in business-large
– More foreign investment industries will not allow small
businesses to work or grow in the
– Higher wages for labour market
– High living standards of people
– More skilled labour
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Formal Sector
o Formal sector includes local and multinational companies
o Registered with the government
o Use modern technology
o Follow international standards
o Produce standardised goods
o Contributes GDP
o Employed by institution
o Employees have regular working hours, normally males
o Work is located in offices and factories
o Capital incentives with few workers
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Informal Sector
o Includes only local industrial units such as cottage industries
o Self-employment
o Labour-intensive
o Use mainly hand tools
o Very few modern machines are used
o Irregular working hours
o Uncertain wages
o Often low standard in quality of goods
o Work done at home
o Not registered with the government
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o Mostly females and children
Cottage and Small-scale
Industry

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Cottage Industry
‘A cottage industry is one in which people produce products using manual power and simple
machines’

Features

o Located in rural areas

o Run by the members of the family

o Produce goods to meet the demand for local requirements

o Invest a very little amount of Capital

o Work is generally manual or with simple tools

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o Operated in unorganized manner
Small-scale Industry

‘Small scale industry employs conventional labor, mainly in semi-urban areas’

Features

o Located in urban or semi-urban areas

o Run by the hired laborers

o Produce goods to meet the demand of wider area

o Invest a comparatively higher amount of capital (the limit is Rs. 10 Million) in Pakistan

o Work with machines run by power

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o Operated to some extent in an organized manner
Factors Influencing Establishment of Cottage and Small-
scale Industries
o Availability of raw material

o Climatic conditions

o Traditional skills

o Local specialization in the organized factory sector

o Local and foreign demand e.g. decline in the export of non-cotton products due to the
concerns expressed by the West about the child labor, environmental pollution and
poor health standards.
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Advantages
o Women can work
o Skill passes from generation
o Less investment required
o No land required as most of the work is done at home
o Fulfil the demand of local market
o Industrial waste can be used as raw material
o No taxes
o Usually products are symbol of country
o Promote tourism
o No pollution
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Problems
o Cheap quality products
o Less profit
o Limited quantity of product
o Time-consuming
o Quality not consistent
o Requires more labour
o Government provides less facilities (electricity shortage)
o Highly dependable on availability of raw material
o Seasonal work and income
o Work 24/7 hours
o Profit goes to owner
o Expansion of business difficult 18
o Outdated machinery and methods of production
 PUNJAB SMALL
INDUSTRIES
CORPORATION (PSIC)

PAKISTAN SMALL THE SMALL INDUSTRIES

DEVELOPMENT BOARD
INDUSTRIES KHYBER
CORPORATION (PSIC) PAKHTUNKHWA (SIDB)
GOVERNMENT
ORGANIZATIO
N

THE DIRECTORATE
SINDH SMALL
OF SMALL
INDUSTRIES
CORPORATION (SSIP)
INDUSTRIES 19
BALUCHISTAN (DISB)
Measures taken by Government Organizations
o Providing marketing facilities
o Setting up technical service centre
o Establishing handicrafts development centres and carpet centres
o Providing local and foreign loans…
o Providing pre-investment counselling and guidance
o Establishment of industrial estates

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Examples of cottage and small-scale industries in
Pakistan
o Brick kiln

o Surgical instruments

o Sports goods

o Pottery

o Electric fans

o Cutlery
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o General engineering
Brick Kiln Industry
Location Outskirts of cities and towns (rural areas)
Inputs
Raw Materials Clay, water
Power Mainly coal
Labour Mainly children and Afghan refugees
Manual mixing of clay with water>moulding into rectangular
Making Process shapes using moulds>drying in sunlight>keeping in fired kiln for
baking to give strength and to turn soft sticky clay into
permanent hard material
Output Hard Bricks
Construction industry (buildings), lining of canals, making sewage
Uses drains in rural areas, protecting underground telephone cable
lines, etc.
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Brick Kiln and the environment
Problems
o One of the pollutants in rural areas
o Discharges carbon monoxide, sulphur dioxide, nitrogen peroxide, soot and other
chemicals
o Damages the landscape
Improvement
o Environmental and child labour loss should be implemented
o Switch to natural gas to control the increase of air pollution
o Chimneys should be fixed
o People should use masks
o Making a ventilated air drying shelter 24
Surgical Instruments Industry
Location Sialkot, Lahore and their military areas

Inputs
Raw Materials Steel and stainless steel
Power Electricity
Labour Mainly children
Coiled strips of steel pressed via machine in which the dye punches out
unfinished strips called blanks > passes through furnace for hardening >
blanks are moved through punching so that they can be separated, metal
Making Process ring is threaded between them to keep them together, placed in the holder
of the second machine diamond particle coated wheel runs against blanks to
turn them into sharp blades. Defected blade is discarded.

Scissors, nail cutters, beauty instruments, surgical instruments, dental

Output instruments

Uses
Beauty parlour for beauty treatment, hospitals for surgery, clinic for medical
treatment
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Sports Goods Industry
Location Sialkot
Inputs
Raw Materials Rubber, wood pulp, stitching thread, leather
Power Electricity
Labour Adults (men and women) and children

Football: A ball consisting of several layers of material is covered with a

waterproof coating. The layers are printed and cut into panels of various
shapes, usually pentagons or hexagons, though sometimes rectangles or other
shapes, all of which are stitched together to form the ball, they’re traditionally
finished by hand by skilled labors. The ball is sewn together inside out. Before
Making Process the last piece is stitched the ball is turned the correct way round, then the
rubber valve is inserted and the last stitch is sewn using a special curved tool,
allowing the labors to pull the threads from inside the ball and ensure a
perfect smooth finish.

Output Cricket bats, football, cricket ball, hockey stick etc.

Uses For playing sports such as cricket ball for cricket, football for football game etc. 27
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Tertiary Industry

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Introduction

‘Tertiary industry is concerned with providing a service and is sometimes known as a

service industry’

The tertiary industry can be divided into different groups such as transport and tourism.

Tourism

‘Tourism means the whole business of providing accommodation and recreation

facilities for those people who are travelling and visiting or staying in a place for a
relatively limited period of time’
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 Presence of tourist
attractions Availability of
capital
Provision of infrastructure
facilities

Government priorities
Factors affecting
Management of tourist tourism
attractions

The feasibility of developing

Marketing & publicity at transport & communication
international level
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What restrains tourism?
o Inadequate transport facilities
o Low level of security
o Inadequate availability of capital for infrastructure facilities
o Mismanagement of tourist attraction, e.g.- deforestation, inadequate sewage disposal,
pollution, etc.
o Lack of marketing and publicity
o Lack of government policies to develop tourism
o Low standard of hotels’ accommodation, hygienic conditions, telecommunication facilities
and transport from airport
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Advantages of tourism for Pakistan
o Correct the balance of payments and lessen the burden of debts
o Creates domestic employment for people
o Encourages local cottage-craft industries and production of souvenirs
o Production of food increases due to increase in creation of local markets
o Locals can use tourist facilities
o Profit earned from tourism can be used to improve local housing schools, hospitals, electricity,
waters supplies
o Reduces migration
o Interaction of tourists with local people helps in cultural linkages with foreign countries
o As the tourist industry is sustainable, tourist attractions will continue to exist 33
Disadvantages of tourism for Pakistan
o The internal and external political and economic situations may decline the number of tourists
o Tourism only generates seasonal employment
o Money required for tourism could be used for economy’s other basic sectors which are or can
be more productive than tourism, e.g.- exploration of minerals
o The building of hotels means that locals lose their homes, land, traditions of livelihood and
become dependant on serving wealthy tourists
o Tourism often destroys local culture and traditions; sometimes tourists don’t respect local
customs and beliefs. This gives rise to new social crime
o Domestic tourists may not be able to afford tourist facilities
o During tourist season, basic necessities’ prices become too expensive for local people
o The natural environment may be badly affected due to the building of tourist facilities, e.g.-
deforestation
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Suggestions
o Government should manage tourist attractions, e.g.- strict laws regarding illegal cutting of
trees and afforestation
o Government should keep tight security level for not only the tourists but the whole country
o Government should provide adequate transport facilities for tourists
o People and government both should work on improving marketing and publicity to
promote tourism
o Governments should make sure that the standard of facilities provided to tourists is high
and provide capital for infrastructure facilities
o The government should make sure that it does not only spend capital on tourist industry
but also other ones 35
Past Paper Activity

Q: To what extent is it possible to increase tourism in Pakistan in the

21st century?

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Types of tourism in Pakistan
There are two main types of tourism in Pakistan:
1. Natural Attractions
Northern areas
 Kaghan Valley
 Swat Valley
 Skardu
 Gilgit Valley, etc.

2. Cultural Attractions
Archaelogical sites
Historic sites
Modern buildings 37
The Salt Mines at Khewra
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Swat Valley
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Kaghan Valley
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Gilgit Valley
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Skardu
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Hunza Valley
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Chitral
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Mohenjo Daro
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Fort Baltit
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Parliament House
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Salt Mine at Khewra

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