Problems Facing the Hayatabad Industrial Estate and Their Implications on Policy Formulation

Abstract

The provinces of Khyber Pakhtunkhwa Province (KPK) and Baluchistan have historically lagged behind other provinces in the race for industrialization because of their geographical disadvantage and the law and order situation prevailing in their regions. Recent figures show that the number of closures and ailing industrial units in KPK has been increasing. Statistics indicate that 55% of firms administered by SIDB and 64% of firms administered by SDA have closed down. In the wake of increase in terrorism activities in KPK and the rampant unemployment, the importance of revival of closed and sick industrial units has further increased. To know the nature and severity of the problems that small industrial units face in KPK, we selected Hayatabad Industrial Estate (HIE), Peshawar as a case study. During the data collection process, we distributed questionnaires and conducted interviews with owners or managers of 48 industrial units in HIE. The survey results indicate that anarchy and terrorism, power outages & energy costs, locational disadvantages, lack of skilled labor force, and inconsistent government policies are major problems as perceived by owners of industrial units. We discuss the implications of these problems and present policy choices to mitigate their impact.