Industries are driven by comparative advantage, with adequate incentives and favorable regulatory environment. Yet Pakistan remains at a comparative disadvantage while FATA is at comparative disadvantage in relation to the rest of Pakistan.
Industrial activity in FATA is restricted primarily to small owner-financed units, operating without government oversight. According to an estimate FATA currently have around 1800 industrial units which mainly include stone processing, Marble, weaving and Hunting & Sporting arms in cluster form and scattered units of PVC pipes, flour mills, furniture, sweet, confectionaries and cement pipes. Service entities dealing mainly in trading, distribution, retailing, custom clearance and transportation are also operating through the length and breadth of FATA. However, poor infrastructure, shortage of skilled labour, power shortages, locational disadvantage, absence of lending, security concerns and on top of all absence of Regulatory Framework is causing not only deterrence to investment in FATA but incurring high cost of doing business. Industrial development in FATA occupies high priority in FATA sustainable plan. The overall strategic objective is to create employment opportunities and economic uplift of the people and area and create value addition to the available natural and human resource. The main elements of the strategy to promote industrial growth in FATA are envisioned as:
- Development of required infrastructure and Industrial Estate to attract investors;
- Work on a legal frame work with the aim to establish a well-defined regulatory regime with the consultation of local people for formulating laws to create a conducive investment climate;
- Focus on the industries processing locally available raw materials;
- Establish a knowledge base regarding investment opportunities, cost of doing business, marketing prospects and export options for investors.