Pakistan’s economic policy makers need to formulate and implement economic policies that will bring about an integrated and autonomous productive structure in the country. In this, the role of the machine building or capital goods industries in general and that of the machine tools sector (machines that make machines) is absolutely crucial. These sectors of the economy can connect industry and agriculture as well as other vital parts of a nation’s economy as a whole. These can increase the production capacity of a nation’s economy and deepen it as well.
The critical machinery on which the rest of the economy depends is comprised of metal-making and metal-working industries such as steel and machine tools. These sectors have the capacity to reproduce themselves, and this serves as the central force for economic growth and technological progress. A machine tool can be used to make all other forms of machinery including computers as well as more machine tools or consumer goods. A technological change in machine tools, because of its importance in the structure of an economy, has a valourizing effect on the other industries such as electric-generating machinery, equipment for making semi-conductors, irrigation technology, fertilizer plants and fertilizers, and so on.
Pakistan has been neglecting or abandoning the critical capital goods sectors (for example the disgraceful and damaging caper of Pakistan Steel Mills), and has been facilitating the development of the housing sectors and urban transit systems, which do little to expand the production capacity of the country in the medium to long run. This is especially so if the technologies used are imported and not manufactured in the country.
Instead of emphasising the development of capital goods industries, successive Pakistani governments have been calling for exporting more, as well as supporting the ‘knowledge based’ and ‘post-industrial’ service economy (for example computers). Therefore, money-valued services are regarded as though equal to manufacturing production capability when gauging their importance to the national economy. This approach reflects a misunderstanding of how a modern economy works. Most of the service economy constitutive of transport, housing, consumption of computers, etc., do not fall from the sky, they have to be produced. These and their raw materials are produced in factories and farms; and these in turn are filled with production machinery. So for example, if textile production is to be increased in Pakistan for domestic consumption or export, the indigenous capacity to produce textile machinery needs to be enhanced and not predicated on the import of textile equipment.
In my book, Local Development in the Global Economy: The Case of Pakistan, published in 1991, I stated that all large wealthy nations in history have been significant producers of production machinery. A nation that must import both its production machinery and consumers goods remains underdeveloped or is headed for decline. I also projected the outcomes of policies relating to capital goods industries of China, Pakistan and India. The projections appear to have been sound.
One of the main roles of a state is to manage the production system. The history of economic development is replete with examples of successful state intervention into the production system in order to secure multiple objectives including: to provide a higher standard of living for its citizens, to catch up with rival states, or to strengthen its defence production. Examples from the UK, US, Germany, France, Japan and Russia illustrate this point.
 The Pakistani state needs to make this intervention, and support the development of capital goods industries in the country. It also needs to provide an educational infrastructure that supports such an endeavour: Institutes of science technology and engineering, engineering apprenticeships and university departments to produce more engineers, skilled production workers, technicians, scientists, and so on. More than this, there needs to be a cultural reorientation towards lauding hard work; especially where one has to dirty one’s hands; inculcating pride in high quality workmanship which is rewarded proportionately, and so on. This should go hand in hand with the propagation of frugality and simplicity in life which should be exemplified by the so-called elite of Pakistan.
Conversely, those who transgress these norms and indulge in wasteful expenditures and corrupt practices need to be punished and disciplined as an example to other potential transgressors; for you can only be as rich as your country. Money saved from reducing expenditure and effective taxation and elimination of corruption could finance the drive to expand machine building and technology generating industries in Pakistan.
That capital goods/machine tools industries reflect strength of national economies, as well as the rise and decline of these, is indicated by the data on world production of machine tools in 2012 in absolute terms. China is the world’s largest producer of machine tools, followed by Japan and Germany at 2nd and 3rd; USA is 7th, and India 13th; UK is 15th. However, the figures are somewhat different if looked at in terms of production per capita: Number one is Switzerland; China is 11th; Japan 6th; Germany 4th; USA 12th; UK 18th; and India 28th. (So now we know which countries are on the move, and which ones are just bragging out of genetic compulsion). It is a disgrace that Pakistan does not get a look in in absolute terms, but in per capita production it is similar to India.
So the message is clear: Harness resources and invest these for the future. Take responsibility for future generations, as well the country’s prosperity and security.

The writer is a freelance columnist.