Electronic products demand on the rise but weak investment deter.
There is no denying that large organizations across the world expand their horizons by making investments in the countries where they smell potential. There are a deluge of instances globally where world-fame companies establish their plants so that the products may actually be fabricated in the country where they would be sold eventually. Almost all foremost global companies have made their investment in manufacturing plants right from Europe to Asia and to Africa in order to exploit the maximum potential.
Pakistan is a land of opportunities with one of the best strategic locations in the global arena. One could have access to the Arab World, Africa, Europe etc. through Pakistan by virtue of its strategically significant location.
It should be a marvelous opportunity for the leading manufacturers of the world to establish manufacturing plants in Pakistan for manifold benefits: some of them being young educated population, low wages, hassle-free procedures etc. However, contrary to this, Pakistan has not been able to tempt the leading manufacturers. With 208 million burgeoning young population and over 60 million middle class with a robust purchasing power, Pakistan should be a dazzling opportunity.
There is a general perspective globally that steel consumption indicates the standards of living in a certain country. The higher the steel consumption, the better the living standards of the denizens of the country. There are certain countries where steel consumption may take hike provided that the inhabitants get easy access with reasonable prices to purchases the products, which provide comfort in an individual's life.
Pakistan is one of the countries which have all the potential for better living standards provided that the youth get opportunities to exploit their talent. Currently, Pakistan's steel consumption stands at around 42 kg per capita vis-a-vis 256 kg per capita globally on average. Steel consumption could be gauged through the use of electronic items.
Electronic products do pave the way to better living standards. Pakistan is net importer of electronic products whereas it should be contrary since Pakistan could attract the renowned electronic manufacturers to set up their plants and export their products from Pakistan to the regional countries having a win-win situation.
The incumbent government needs to ensure that electronic engineers of Pakistan stay in Pakistan rather than looking for opportunities elsewhere. When the skilled workforce of a country prefers working in other countries of the world, it becomes catastrophic for the country of their origin.
There are hundreds of Pakistani-descent engineers who could not find better opportunities in Pakistan so opted to work in other parts of the world. Pakistan government must ensure that skilled force gets commensurate and valuable opportunities within the borders of the country. The government may work on war-footing to ensure that renowned electronics organizations invest in Pakistan having a win-win situation.
Pakistan has terrific relations with China, Japan and South Korea. These three countries are leading the world in the realm of electronics. The state-owned China Electronics Corporation (CEC) with a revenue of over $30 billion could be attracted to invest in Pakistan. It is one of the leading providers of telecoms equipment in China and has thousands of employees.
The revenue of the Japanese firm Mitsubishi Electric is over $39 billion. Pakistanis do use the products of the company and it would be marvelous in case the incumbent government could get this leading electronic firm to invest in Pakistan. Honeywell International is another leading name not only in the USA but also in many countries with a revenue of over $39 billion. Pakistan's recent diplomatic achievement in terms of relations with the USA could be a stepping stone in terms of getting this firm in Pakistan.
LG Electronics with revenue of over $47 billion is a renowned name. This organization is the second-largest TV manufacturer in the world. Pakistan is the country where over 70% population own TV sets. LG could get whopping benefit in case it sets up its plants in Pakistan. Revenue of Amer International Group is over $49 billion.
This Chinese firm may find Pakistan a great investment avenue. The giant Japanese electronics producer with a $67 billion revenue, Panasonic has its presence in Pakistan for decades. There is need to manufacture the products within the boundaries of Pakistan which could surely benefit the company and our country. Tokyo-based Sony has massive $70 billion revenue. Pakistanis prefer its products however the missing link is the manufacturing plant in Pakistan. Hitachi is a buzzword in the world.
The company's revenue is over $84 billion. Efforts are required by the relevant authorities to ensure the manufacturing of products of the company in Pakistan. Hon Hai Precision Industry, known as the company that makes the iPhone has revenue over $135 billion. Its customers are Amazon, Hewlett-Packard, Nintendo, Sony, Toshiba, Intel, Microsoft and Google. This company has the credit of being the largest contract electronics company globally. Finally, the leader of the world Samsung Electronics with the revenue of over $173 billion is a household name in Pakistan.
The South Korean tech superpower may reap benefits from the burgeoning educated population with sound purchasing power. The investment by this company in Pakistan in terms of setting up a plant could be very refreshing.
A thought by the Board of Investment of Pakistan could be given in this regard. The Board of Investment needs to come up with out-of-box approach to ensure that Pakistan benefits from FDI from the leading electronics giants.
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|Publication:||Pakistan & Gulf Economist|
|Date:||Aug 11, 2019|
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