etermining the features of the best industrial policy for an economy is often a subjective exercise depending on the criteria used for evaluating it. Pakistan has had no permanent industrial policy.

Over recent decades Japan, Germany and China have had some of the most successful industrial policies. Each of these country has tailored its industrial policy to its unique economic context, with varying degrees of government intervention, innovation focus and international competitiveness.

The effectiveness of an industrial policy is often judged by how well it aligns with a country’s economic goals, industrial structure and global economic environment.

The current industrial policy of Pakistan aims to revitalise the manufacturing sector, address energy constraints and promote export-led growth. In principle, these are laudable goals. However, the country lacks the infrastructure required to support some industries and its bureaucrats frequently act as inhibitors instead of facilitators of industrialisation.

The policy seeks to reduce dependency on agriculture and textiles by promoting other manufacturing sectors such as automobiles, pharmaceuticals, engineering goods, and information technology. The country’s economic planners want to enhance its infrastructure, particularly through projects like the China-Pakistan Economic Corridor, to improve connectivity and provide industrial zones.

The industrial policy looks to provide reliable and affordable energy to support industries, addressing the energy crisis that has historically hampered growth. Another aim is to attract foreign direct investment (FDI) by offering incentives, improving the ease of doing business and creating Special Economic Zones. However, FDI inflows amount to a trickle.

Providing financial and technical assistance to small and medium enterprises (SMEs) to integrate them into the industrial supply chain has been a stated objective of all industrial policies but no concrete steps have been taken to strengthen this sector so that it still lacks adequate financing and other facilitation.

Pakistan aims to encourage exports by offering rebates and subsidies and supporting market access through trade agreements. Unfortunately, exports have been stagnant for the last eight years.........

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