Globalization of Industrial products for the growth of Pakistan economy

We human beings need to coordinate with each other for our survival .The world we live in is
more associated than whenever in history previously. Because of the advancement in the field of
science and innovation and expansion in worldwide interactions in the recent few centuries.
Globalization is a process of mutual collaboration and reconciliation among individuals
,organizations or among different countries. Globalization plays a major role in interacting
populations socially, culturally and politically. This firm connection and dependence among the
nations has made world a global village. . As globalization is the process of international
interconnection and global integration the global economy is highly dependent on it which
means the more a country is interconnected to other the more the economy will prosper which in
turn increase the living standard of the people. The process of globalization has opened new
markets for Pakistani products and provided a way to boost the national economy.
The process of opening Pakistan’s economy to the world began during the initial period of
1990's. Government has now maneuvered to change Pakistan's financial framework,
incorporates, export progression and exchange advancement and this result in an increase in
GDP of Pakistan by 25% from the industrial sector after Agricultural sector. Industrial sector of
Pakistan has faced many issues and globalization has impacted it in both positive way by
expanding trade network and international recognition of Pakistani products and negatively by
lack of new technology, unskilled labor force, unjust competition and way too high
manufacturing costs. Pakistan like all other developing countries want a fair competition with the
developing world. Pakistan has many bilateral and multilateral Free Trade Agreements (FTAs)
with many countries for example: Trade & Investment Framework Agreement (TIFA)between
Pakistan and USA, Pak-China Free Trade Agreement in Goods & Investment, Agreement on
South Asian Free Trade Area, Pak-Sri Lanka Free Trade Agreement, Pak-Iran Preferential Trade
Agreement etc. which are a direct consequence of Globalization and economic openness of
Pakistan.
Above graph shows a fluctuation in trade exchange from 1993 to 2017
Globalization has played a vital role in the evolution of global economics. From year 1990 to
2002 export of Pakistani products in international market has not significantly increased and is
dropped from 0.16 to 0.15. There are many factors which have obstructed the globalization of
industrial products some of them are:

I. Unskilled labor:
Due to the advancement in technology nations have developed a lot by replacing
manpower with modern machineries. Globalization has sped up this process therefore,
people are not trained enough to operate such modern machineries this is one of the
reasons that Pakistan exports are lacking. It is true that nations do not develop without
education this is the one reason Pakistan suffer from low export resulting in low economy
.Reason behind this is the lack of the special training institutes where laborers are taught
how to operate modern machineries Pakistan is in dire need of expert laborers .Pakistan
economy can cross a huge mile by just providing skilled labors to the industrial sector
.Another reason is lack of jobs ,good salaries and related facilities in industrial sectors
.Many experts and educated professionals are then urged to look for a better job outside
the country. This loss of skilled labor force is perilous for industrial sector indeed .

II. Lack of implementation of worldwide Quality standards:

From the onset of the industrial revolution to this date industries have revolutionized with
modern techniques and methods .Pakistan's inability to effectively impose the
international quality standards has hindered to sell products to international market. The
execution of these standard requires implementation of strict regulations and numerous
countries require obligatory certification by an autonomous outsider on the imported
items that demonstrates that the standards are maintained. These requirement by the
countries add additional cost to the product and cause problems for exporters.
 III. High manufacturing costs:
High cost of manufacturing is another reason that makes Pakistan uncompetitive in the
global market for doing trade .Due to the fragile economy underdeveloped countries are
unable to manufacture the industrial products at the same cost that the rest of world is
manufacturing .This reduces the ability of Pakistani products to reach the global market .
The main issues of high cost of manufacturing in Pakistan are high rates of raw material,
services, deficiency of human resource, technology, infra structure and government
support. Pakistan manufacturing industries are affected badly if they unable to compete
with the other countries in regard to the price at which the product is sold at the
international market .In relation to the cost manufacturing and the problem faced by the
Pakistani industries is dumping . By dumping it means the countries with strong
economic background exploit the markets of the developing countries like Pakistan by
keeping the price of their products very low ,at which the producers are unable to sell
their products and suffer from loss .This is the reason the countries that are stable
economically have a large market share then the developing countries .

IV. Limited access to markets:

Industrial products of Pakistan have limited access to the global market .Around 3511
Pakistani products have access to the US and European markets under the Generalized
scheme of preferences (GSP) for developing nations .For further economic growth
Pakistan need to reach the markets of Australia, Africa, South America and Central Asia.

V. Non variational export products and markets:

Non variational is another cause, by this we mean limited amount of products are
exported with no diversity. Pakistan major exports include sports good, leather and textile
other include rice, cotton, fish, fruits which are agriculture based and are low cost .

VI. Lack of modern Technology in Industrial Sector:

With new inventions and discoveries every sector is influenced by the technology so as
the industrial sector .Hordes of new machineries are there in market .Industries now are
equipped with modern machines which have not only replaced manpower but have also
increased the efficiency and reduced the cost of manufacturing.

VII. Increase in international market competition:

Competition among the nations has increased as every nation is striving to stabilize its
economy .Developing countries like Pakistan has to face tough competition in the global
market which is already full to its maximum capacity with foreign countries .In order to
attain a prominent position in global market industrial products of a country must be
capable enough to compete.

VIII. Foreign investments at risk:

 Pakistan is the country most affected by the curse of terrorism .This is one of the reason
that the foreign investors withdraw their attentions .Political instability also reduces
foreign investments significantly.

SUGGESTIONS:
1. To lower the cost of manufacturing the country should have enough energy and water
resources to meet the current needs .So that the Pakistani industrial products be able to
compete in international market .
2. Government should ensure the proper training and education of the workers so that
they can operate modern technology without any hindrance .Different vocational
centers should be opened in different cities for this purpose .This will help the
industrial sector to learn the working of the global market and to increase the
productivity.
3. Government should incentivize the production of the high quality products to increase
the global market share .Pakistan need to perform certain structural reforms to
encourage the local producers .
4. Pakistan need to establish conditions that provide the macroeconomic stability and
also introduce better incentives to attract the foreign investors. Peace in a country also
plays an important role to attract the foreign investments.
5. To promote the efficiency through increased trade and investment government should
make certain policies and plans.
6. Pakistan need to balance the external debt that has accumulated in nearly 75 year from
the inception to today. International loans are very important as the provide us with the
adequate resources to run the industries and build our economy.
7. Government of Pakistan should provide more opportunities to the new companies with
innovative ideas as they know how to make their space in the international market
through uniqueness .
8. The industrial sector of Pakistan needs to work on a sustainable product development
and manufacturing processes, that are more environmentally conscious and less
expensive to make.
9. The Ministry of Commerce need to provide market access to all kind of export
products unobstructed.
10. To make the space for Pakistani products in international market government should
ensure the quality standard of the products . Pakistan need to work on building its
capacity to handle large scale international products orders and development of new
industrial sectors.
11. Pakistan need to work on the process of improving and upgrading the industrial
infrastructure .

References:
1. https://www.globalization101.org/what-is-globalization/
2. https://www.ukessays.com/essays/economics/globalization-and-its-impact-on-pakistan-
economy-economics-essay.php
3. https://ustr.gov/sites/default/files/Pakistan%20GSP%20handout%20August
%202012%20final%20version.pdf
4. https://www.mbtmag.com/global/article/13226537/three-ways-globalization-is-
influencing-manufacturing
5. https://www.oliverwyman.com/our-expertise/insights/2014/jul/article-series-
globalization.html/
6. https://www.ntc.gov.pk
7. http://www.commerce.gov.pk/about-us/trade-agreements
8. https://link.springer.com/article/10.1186/s40008-019-0169-8