The Seventh Wave - Pakistan’s Chance to Achieve Escape Velocity

aslam #24 I had heard of the road financed by local businessmen that I mentioned, but didnt know of the locally financed airport as well. I am not up-to-date on the local economy in Sialkot, but it seems they will probably have a dry port in Sialkot once the airport is built - rather than having to send their goods to Lahore.

Here credit must be given I think to the present government for stepping aside and letting local entrepreneurs do what government agencies like PWD, i.e. the Pakistan Works Department, better known as Plunder Without Danger :-) failed to do in the first few decades after independence. Also, I think local self-government helps - since I cannot imagine traditional DCs allowing locals to buying the motorbikes I mentioned to the police!!

Sialkot of course has a long-standing tradition of private entrepreneurship - back in 1952 my father visited UK and while there purchased some surgical instruments requested by his sister-in-law in Pakistan who was a doctor. After the purchase, he was surprised to see that these were made in Sialkot!! This was over 50 years ago! There are other centers of manufacturing coming up in Pakistan too of course (Gujranwala, Chiniot in addition to Karachi and the coastal areas). I think what they all have in common is their reliance upon the basic skills and industry of the average Pakistani. This is where individual Pakistanis do indeed ``stand high and tall” (to modify and make applicable the phrase that was ironically stated in the article above).

Re: # 21 by Charlie on September 5, 2006 5:33am PT

Dear Charlie,

Great post indeed. I agree with most of your points in the post, and would like to keep GOP at an arms length. I do agree with only the design house concept, but for that to materialize we need extensive educated workers in the electrical engineering profession. This requires political stability for the workforce to be developed in a rapid way. Getting young engineers by the time they are 22 years old, is a tall order for the disruptive Pakistani society.

And here is the hiccup, I see

Your point 1. {It should be multinationals doing this work (if they realize that it is cheaper to do this thing here.) }

Days of just being cheaper are over. Dell is bringing its call centers back to the US, because there is a huge cultural disparity. Pakistan has to contend with political image crisis that can only be removed if they hire political lobbyist in the US, in Capitols of every major US States. Commerce is a state issue, where multinationals usually resides. It seems that paindoos in Islamabad have yet to realize that.

Charlie, on your point #2, software is secondary to the primary function of making the chip, and this vertical integration is all but impossible. For example, Johnson Controls has taken over the controls market by providing everything to the extent of providing their controls software education. Penetrating such a market is almost impossible.

On your point #3, I disagree to the extent that lying and deceiving should not run a society. This is of course more of the government policy issue, which could hurt the already tarnished Pakistani image.

On your point #4, you are banking too much on those who have money and who are unscrupulous. I would never allow those who have money to run the show, when it comes to high level knowledge based industry, like design houses. Yes, they can be investors, just like any venture capitalists are. Personally, I believe that those in Pakistan who have money are not much better than the government.

I agree with you that {I don`t expect anything more from government.}. I would just add that I should not expect more than money from the Sethias. Their ill-gotten money could jeopardize the whole nascent technology sector of Pakistan.

On your post #5, I agree wholeheartedly, as was suggested in one of my earlier post.

Thank you for such an enlightened post.

Respectfully submitted,

I personally liked the posts of Behram, tahmed and aslam... Quite a positive approach...

Re: # 29

Dear Behram,



Here are again some comments about your post.

>> do agree with only the design house concept, but for that to materialize we need extensive educated workers in the electrical engineering profession.


Right... I agree... But I don`t think that it is very difficult to do... For fresh engineers to work in design houses, they need to know a little basics of digital design, hardware architecture, modeling in hardware, coding in C/Assembly etc.. Which they already do at universities in Pakistan.
For a little better start, they need to know embedded operating systems, ASIC/FPGA designs, System level design and understanding the design flow... It can be covered in a couple of new courses. So, I don`t think that at courses level, we might have some probelm generating good people. (Because of my background in Academia, I have a lot of friends currently teaching /planning to teach in Pakistani universities. And If I suppose that if I wanted to start a design house, it will be the least important thing for me to worry about the courses as I could easily ask them to teach whatever I needed. Or I can even deliver lectures once a week in my university to attract the most talented engineers to work in my design house.)

Yes, if we are talking in terms of numbers of engineers because of the opinion that the number of good engineers is the bottleneck for the number of design houses in the country, then we probably need to open a few more universities related to engineering which they are already opening... (Quality of engineers will have to be compromised in that scenario however.)



>>Days of just being cheaper are over. Dell is bringing its call centers back to the US, because there is a huge cultural disparity. Pakistan has to contend with political image crisis that can only be removed if they hire political lobbyist in the US, in Capitols of every major US States. Commerce is a state issue, where multinationals usually resides. It seems that paindoos in Islamabad have yet to realize that.

Perfectly agree...


>>On your point #3, I disagree to the extent that lying and deceiving should not run a society. This is of course more of the government policy issue, which could hurt the already tarnished Pakistani image.

Right... I agree..
We will discussPakistan`s image someother day whch I think is not a big reason for lack of investment...

>>On your point #4, you are banking too much on those who have money and who are unscrupulous. I would never allow those who have money to run the show, when it comes to high level knowledge based industry, like design houses. Yes, they can be investors, just like any venture capitalists are. Personally, I believe that those in Pakistan who have money are not much better than the government.


Yes, I was talking in terms of Seths taking the roles of investors and venture capitalists... It is the duty of educated Pakistanis to educates seths and show them that more profitable ways of earning exist in the world.

Even if Seths don`t understand, Venture Capital companies are already opening up in Pakistan and venture capital companies from west can prove to be even more helpful.

We really don`t needs Seths to make things working if they find our proposals bad.


It is always interesting to discuss the things with someone who understands what you are talking about. It rarely happens on chowk and never happens on other sites... :)

Now I can see some people trying to play the roles which are ``bigger than themselves``. Only way for them to become developed is to bulldoze capitalism and make a new ``ism`` to be successful... Isn`t it a difficult way to reach to a relatively easier target?

Re: # 40

May be, I was not that much clear in explaining relationship between industry and academia... (My example was very rough.)

Being more precise, university and industry should go side by side. If Industry is complaining about universities not doing enough, it is infact pointing to its own weakness.

Industry should have good terms with universities and guide them to generate professionals according to their needs. Smart software houses often have good contacts with faculty members and pick up good graduates as soon as they come out of university or even start their final year projects.
On the other hand, Fan makers in Gujranwala are always complaining that they have unresolved issues or they are not having any change in their state since last 30 years. Reason is simple... If you are smart industrialists, you keep your influence in the university and provide constant feedback to the academia guys. If you are not, then you complain...

The attitude of landlords in multan, as mentioned by tahmed, is attitude of so many people among us. This attitude is reinforced, when we don`t see so many positive examples around us... Some exceptional people set examples, rest of them follow them and then it becomes a culture...

Re: # 43 by Charlie on September 5, 2006 1:29pm PT

Dear Charlie:

Ignoring some of the rubbishes around here, we can definitely continue in evaluating what Pakistan can do to enhance its drive for modernization and ``taraqui.``

I recently read that US spends about 0.5% of its GDP on R&D. I have no idea, what percentage of GDP does Pakistan spend on it`s R&D. Do you? Could Pakistan, as a society afford spending 0.5% of its GDP (around $100B) on R&D? I doubt that paindoos in Islamabad would want to do such a thing.

Respectfully submitted,

behram writes <<< Get off you high horse, PLEASE. >>>

Facts bother you, I can understand that, you want for people in the developing world to keep busy with pipedreams that will never amount to much unless the big picture is taken into account, I can possibly understand that also given that you are a house slave but the totally devoid of facts post that you just did in trying to rebut my post, reminds me of the mirasi bskhan on here. Such a post was unexpected, even given my low expectations from a dimwit like your good self.

Respectfully submitted,

For those who want to read the entire reports that I quoted from, here are the links

Quote 1


Quote 2

What the author looks over, and what is fundamental to any industrial base developing in the ``Third World`` countries, is that the world system is rigged in favor of the developed countries, the countries that developed an industrial base on maximum protectionism themselves while using their global clout today to force unfair trade practices on the ``Third World`` that lead inevitably to economies dependent on either primary products or cheap assembly points, neither of which help with either poverty alleviation or development.

Let me quote a few excerpts from an Oxfam report on trade

(quote) ``Virtually all of today’s developed countries built up their economies using tariffs and subsidies (and many other measures of government intervention) throughout the 19th century and most of the 20th century (in particular, until the early 1970s). Throughout most of the period between the 1820 and 1945, the United States maintained average industrial tariffs at around 40 per cent, and never below 25 per cent except for brief periods, far higher than those it xii accepts from developing countries in the NAMA negotiations today. Five of the six fastest growing developed countries in the so-called ‘Golden Age’ (1950-73) were high tariff countries (Japan, Italy, Austria, Finland and France).

Double standards are thus rife when these countries preach the virtues of free trade and free markets to today’s developing countries, many of which in fact have tariff rates lower than those that prevailed in today’s developed countries at similar levels of development....The numerous success stories among developing countries over the last 50 years, from the Republic of Korea and Taiwan Province of China to more recent examples in China, India and Viet Nam, show that, while some trade liberalization may be necessary and beneficial, infant industry protection is vital in the early stages...`` (end quote)

Also consider the hypocrisy of the West in the tariffs they place and the dumping that takes place in the manufacturing sector on which most developing countries that venture out of raw materials are involved in:

(Quote)`` Exports of textiles and clothing are a vital source of employment and income for developing countries. Under the Multifibre Arrangement, rich countries used quotas to restrict entry of these goods to their markets....Exports of textiles and clothing to industrialized countries face average tariffs that are three times higher than for other manufactured goods, as well as sharp tariff peaks of up to 40 per cent for certain items. These taxes represent a perverse redistribution of wealth from poor to rich countries. In 2001, exports from Bangladesh to the United States generated $331 million in tariff revenue for the US Treasury; in the same year, net US aid to Bangladesh was just $87 million. WTO negotiations over industrial tariffs (non-agricultural market access, or NAMA, talks) are supposed to address this problem, but are currently stalled. Tariff reduction offers from the EU and USA are too modest, and are tied to unfair demands for reciprocal liberalization by poor countries.`` (end quote)

Note that tahmed and co, those who want to keep the developing countries forever dependent on their ``Anglo Saxon`` lords and masters, will preach about private endeavor and entrepreneurship, knowing full well that without state intervention no base will develop and when no base develops no entrepreneurship will ever amount to anything. Now if these developing countries were to develop will that affect the balance of power and wealth that the first world now enjoys due to their monopoly exclusion of the majority world. You bet they will, will they allow that to happen? Of course they will not, regardless of the good intention that tahmed and co attribute to them. That would be like Walmart declaring bankruptcy for no reason just that Target or K-Mart capture its market. Thus, the only way forward for countries of the ``Third World``, developing countries is to detach, withdraw from the economic system imposed by the West on them, and move forward together, until par is reached, and then engage the West on equal terms. Other than that, semiconductor or no semiconductor, development for developing countries are mere pipedreams.

Re: # 25

masadi:

`` In 2001, exports from Bangladesh to the United States generated $331 million in tariff revenue for the US Treasury; in the same year, net US aid to Bangladesh was just $87 million.``

how much revenue did it generated for the bangladeshis? any idea.

Re: # 25 by masadi on September 5, 2006 8:07am PT

Dear masadi:

Can you not resist by not interjecting your worthless opinion, where you do not belong? I was getting ready to respond to Charlie post #21, when on refreshing my screen, I saw your stupid post, and of course, as usual you brought in all those irrelevant issues.

So, let us clear this garbage thrown by your post.....

{What the author looks over, and what is fundamental to any industrial base developing in the ``Third World`` countries, .....assembly points, neither of which help with either poverty alleviation or development.} FYI, semiconductor industry is not considered as industrial base industry.

Then your rubbish post brings in the issue of high tariff....

{Five of the six fastest growing developed countries in the so-called ‘Golden Age’ (1950-73) were high tariff countries (Japan, Italy, Austria, Finland and France). }

In this particular issue tariff was not even discussed. Nowadays, large corporations move products as unfinished goods, and most of the time tariffs never becomes an issue. Would you know any difference?

{Double standards are thus rife when these countries preach the virtues of free trade and free markets to today’s developing countries, ....}

And where has the author talked about advantages or disadvantages of free trade?

{Note that tahmed and co, those who want to keep the developing countries forever dependent on their ``Anglo Saxon`` lords and masters, will preach about private endeavor and entrepreneurship, ...... }

O! you just SHUT UP?

{Thus, the only way forward for countries of the ``Third World``, developing countries is to detach, withdraw from the economic system imposed by the West on them, and move forward together, until par is reached,.... } Yeah, Right! So the third world countries can feed other with crap, as you are doing with your tirade against the west, eh!

Get off you high horse, PLEASE.

Respectfully submitted,

Great article. The structuring of the article around the different stages of in the semiconductor lifecycle makes it a very informative article. The future is indeed (as in the famous movie phrase)...plastics. Or semiconductors, in this case. This is something those involved in OPEN should probably dedicate some seminars.

I am very optimistic that we will see Pakistan moving forward in such areas. And semiconductors could well be a promising area.

The key is to encourage a culture of entrepreneurship in Pakistan. Charlie #21 mentions the Sialkot seths - in this connection, a few weeks ago I heard a US-based Pakistani who had recently interviewed local businessmen around Pakistan, and he had something to say about them as well: On going travelling to Sialkot, he was struck by the high quality of roads and the excellent traffic control by motor-cycle riding cops. On interviewing the local businessmen, he was told that after giving up on the government, they had pooled resources to finance the road (necessary for their export-based industries) and then pooled some more money and bought the local police the motorbikes!! This was entrepreneurship at work. Then he went to Multan, center of landlords in the panjab. He was told by the local businessmen of excellent opportunities for planting fruit trees - and they asked him to ask the government to invest money in it!! He responded by asking why, if profit-making opportunities existed, they did not invest themselves. They had no answer. But he knew the answer, he told us. It was the ``landlord culture`` of that area. Which, in contrast to Sialkot, has created a culture of dependancy.

Re: # 23
tahmed, i would agree with you about sialkot, the businessmen there are also building a airport in the private sector, most are honest there are few rogues, i was defrauded by one. on the whole i think north¢ral panjab are years ahead of southern panjab&rural sindh. i think one reason is there has been a massive migration overseas from north¢ral panjab which has led to prosperity.

It is my understanding that idea of an idegenous semi-conductor industry was abandanoned by planning commission sometime in early to mid-90s. In the 80s Japanese invested heavily in education sector to promote Electronics engineering at Polytechniques and university level. As a matter of fact the Electronics Department in Dawood College of Engineering won a Center of Excellence Award from Japanese Government. At that time Afghan war was in progress and US government was forcing its allies and corporations like Sears, Walmarts, and such to invest in Pakistan. Of course the minute the war ended everybody took their business elsewhere. Japanese stopped funding and a semi-conductor research institute either in Islamabad or in Wah ( I don`t exactly recall, had to be shut down).

The semiconductor technology is machine intensive, whereas design part of it requires highly educated and skilled workforce. Pakistan lacks in the latter, and it cannot be done without govt involvement in developing dedicated education institutions. Corporations just wont do this.

Dear Imran Mustafa,

Very good article indeed. The way you have explained us the basic of semiconductor industry simple language, I just loved it...

Here are a few points I will like to mention:

1. Government run organizations are inefficient, politicized and hence not really growth oriented. A Fab is going to meet the fate of the steel mills if established by government. We should not expect government to take the initiatives. It should be multinationals doing this work (if they realize that itis cheaper to do this thing here.)

2.There is still more money in software. Even in embedded systems i.e. PDA, mobile phones, GPS, MP3 etc., more money is spent in software develoment.

However I don`t mean by this fact that semiconductors shold be ignored. With the evolution of Mems, Nanodevices, biochips, we are going to have very long term benefits from a basic investment made today.

3. I have a few chinese colleagues of mine who often talk of Semiconductor industry setup in beijing. No IP protection, no business ethics, designs are copied using brute force techniques like copy attacks against digital watermarking and much more... Yet still, they are on top of semiconductor industry.

I think it is the same seth sahib`s approach as you were portraying... It might have started as a chinese seth buying a couple of test machines, then the other seths seeing the seth earning more money bought their own machines and the culture flourished to an extent that now they have silicon foundaries, design (rather copy/paste) houses and much more...

It is all about making it part of the culture.

Just like the way , Seths in Sialkot know how to get orders for football stitching... Now, let`s say some other country looks at sialkot and tries to establish a football, surgical instruments and jackets. they will not be do it. As it takes time for develoment of culture... (I believe Sialkot can be a good place for electronic biomedical instrumentation.)


Role of the government can be buying a few machines, setting them up at polytechnic institutes so that workfoce for machine operators can be made available, arranging a few exhibitions at local industrial markets presenting a couple of business plans and that`s it. Smart Seth will see the oppuruity and grab it first. Rest will follow.

I don`t expect anything more from government.


5. I am ,personally, if I ever become an entrepreneur, inclined towards design houses. They are intellectualy challenging and professionally satisfying. No need of extra large investment and returns are good.

``#19 by injundollar

As long as our cities infrastructure, roads, streets etc. remain under the control of babus, municipalities etc, there is no hope.``

The problem is more intricate than that. A whole parallel politico-economic ecosystem has been built around the delivery of public services by our netas since independence. No economic activity can take place without their hand in it. The aim of the system is to raise funds for personal enrichment & political activity. Essentially a political ponzi scheme.

Go to a govt. office and if the bribe is higher than what you expect to pay, the standard answer is ``what to do, we have also paid (the politicians) to get this posting and we have to recoup the money``. That about sums up the problem

It is going to take years, perhaps decades to untangle this cobweb.

#17 TVARD

//But walk out on the street and you are back to the third world with a thud. //

As long as our cities infrastructure, roads, streets etc. remain under the control of babus, municipalities etc, there is no hope.

Ways are to be found how to free them from these white elephants who only suck public money into their belly and do just nothing.