INTRODUCTION

From what was originally meant to be a study on the sourees of growth in Pakistan’s manufacturing sector, has by the force of circumstances, turned into a study explaining its decline. The premature deindustrialization of Pakistan’s economy reflected by the reduction in the contribution of the industrial sector to the GDP, as well as by the decline in the share of industrial Labour force in the total labour force continues without drawing serious attention from the academics, the policymakers and the people in general. The occurrence of the same phenomenon during the 1970s in the developed countries on the other hand, kindled a serious debate on deindustrialization in the academic circles. Some attributed it to the industrialization of the less developed countries, particularly the Newly Industrialized countries, in south East Asia. But, and as pointed out by Singh, the decline in the industrial labour force in the is actually a post industrial phenomenon, When the contribution of the service sector vis-à-vis the production sector increases.

The decline may also be explained by increase in the production of high tech industries, as well as the use of machinery and capital goods which are capital using and labor saving.

This type of uneasiness about industrialization of the Laces, however, still seems to worry some. It has crystallized in the form of economic theories and the use of the same in drawing up conditional ties by the international Menetary Fund. This has adversely affected the level of investment and the performance of the industrial sector even in countries that are considered success stories such as Turkey. The premature deindustrialization that is the outcome of these policies in many Laces including Pakistan has ominous consequences. These are on account of the inability of the industrial sector to provive employment to the surplus agricultural labour force that will be released as traditional agriculture transforms itself into commercial agriculture. Moreover, growth in the agricultural and service sectors connote be sustained unless the industrial sector is expanding and growing.