Document Type


Publication Date

Fall 8-10-1955


The low income level of the Pakistani people is due to population density and under-utilization of resources. Industrialization will create greater job opportunities for the population and will enable fuller utilization of other kinds of resources. The shift from agricultural production to manufacturing production, in general, promises greater productivity. Moderate industrialization is possible in Pakistan because it possesses an ample volume of agricultural raw materials such as jute, cotton, sugarcane, and tobacco and sizable energy resources and mineral ores, and because the abundant labor supply can be trained with relative ease. Entry into industrialization is hindered by low income levels and a consequent low level of domestic capital formation. Foreign investment must therefore be encouraged. Examination of the investment atmosphere in Pakistan discloses certain factors that tend to retard the flow of incoming capital such as regulations limiting foreign investment to certain fields, local participation requirements, mineral development laws, certain import restrictions, Controls over security issues, and high corporation and personal taxes. On the other hand features encouraging the entry of foreign investment funds include a liberal policy on profit remittances and capital repatriation, tax relief for investors, government aids to new firms, customs exemptions on selected capital goods and raw materials imports, improved government administration, and a generally favorable attitude toward private enterprise. The conclusion is reached that Pakistan will be successful in employing foreign capital in the development of the country.