Impact of industrial operations on Pakistan’s economy
Industrialization plays an essential role in the economic development of underdeveloped countries. As historical records show, the developed countries of the world have broken the vicious cycle of poverty by industrializing rather than focusing on agriculture or the production of domestic resources.
Currently, Pakistan, as a developing country, wants to improve the standard of living of its people. For this reason, it pursues policies that support the privatization and deregulation of the economy.
Industry plays a complex role in economic development, but these are some of its most important effects.
Industrialization enables countries to make the best use of their scarce resources. It increases the quantity and quality of the products produced in this company, which further contributes to the gross national product (GNP).
In an industrialized society, the work of workers is worth more. In addition, due to higher productivity, individual income increases. This increase in income raises the standard of living of ordinary people.
A nation that depends solely on the production and export of raw materials cannot achieve a rapid rate of economic growth. Restricted and fluctuating demand for agricultural products and raw materials, as well as the uncertainties of nature itself, hamper economic progress and lead to an unstable economy. Industrialization is the best way to ensure economic stability.
Industrialization changes the structure of the country’s foreign trade. It increases the export of manufactured products, which are more profitable in foreign currency. But at the same time, the processing of the raw material at home reduces the import of goods, thus helping to save foreign exchange. The export orientation and import substitution effects of industrialization help improve the balance of payments. In Pakistan in particular, exports of semi-finished and manufactured products have generated favorable trade. Industrialization offers increased employment opportunities in small and large industries. In an industrial economy, industry absorbs the underemployed and unemployed workers in the agricultural sector, thereby increasing the income of the community.
Industrialization favors specialized labor. This division of labor increases the marginal value of the labor product. In other words, specialized work is more profitable. The income of a worker in the industrial sector will on average be higher than that of a worker in the agricultural sector.