Industrial Policy: Domestic Challenges, Global Imperatives, and Pakistan’s Choices

Public policy is aimed at increasing the efficiency of the industrial sector in Pakistan. This paper looks at four issues. Firstly, it looks at the adjustments the new government needs to make to restore macroeconomic balance. Secondly, it discusses the global changes that have occurred in the industrial sector and how these could be incorporated into Pakistani policy making. Thirdly, I have briefly discussed the history of policies implemented in Pakistan. Lastly, I have discussed the importance of decentralized industrial policy making. This paper also conducts an empirical analysis of the impact of industrialization on poverty. It is concluded that industrial development in Pakistan has historically been heavily dependent on government intervention and there was poor growth in this sector as compared to other Asian economies. The paper also presents five proposals aimed at achieving higher growth in the industrial sector.