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TABLE 2.15: ESTIMATED FOREIGN EXCHANGE SAVINGS DUE TO THE
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- B. With Import Substitution 1,196
| TABLE 2.15: ESTIMATED FOREIGN EXCHANGE SAVINGS DUE TO THE AUTOMOTIVE SECTOR, 2009-10 ($ Million) Low* High** A. If Imports of CBU and no domestic production 1,677 1,929 c.i.f. value of imports cars 770 886 buses trucks 142 162 motorcycles 310 357 tractors 455 523 B. With Import Substitution 1,196 Imported CKD Units and Parts 732 s Imported inputs for domestic parts 320 a Investment 131 m Remittance of Profits 13 e C. Exports of Vehicles and Parts 126 Foreign Exchange Saving ABC) 607 859 Sources: Author’s Calculation using numbers from PAMA, EDB, PAAPAM and CMI (sources are given in detail in Table 2.7). * with cif prices equal to domestic price – the statutory customs duty – sales tax ** 15% higher than in the low case. An overall summary of the key magnitudes of the sector as derived above is presented in Table 2.16. The automotive sector has begun to acquire a prominent role in the industrial structure of Pakistan. It accounts for almost 5 percent of the value added in the manufacturing sector, which implies that it is already larger than industries like sugar, pharmaceuticals and vegetable ghee. It has also made a major contribution to the double-digit growth of the manufacturing sector in the peak of the Musharraf era. However, our estimates of the size and contribution of the automotive sector are somewhat more modest than earlier estimates. SMEDA (2005), for example, estimates employment in the sector at 500,000 while our estimate is closer to 209,000. Similarly, the value added by the sector is reported at Rs 153 billion whereas our estimate is Rs 108 billion. Further, there is need to recognise that while the automotive sector is beginning to make a significant contribution to the economy of Pakistan, it is still relatively small by 31 international standards. Table 2.17 makes a comparison of the contribution of the automotive sector in eleven developing countries. Pakistan ranks relatively low in the indicators. However, in the indicator, sector turnover as percentage of the GDP, Pakistan ranks higher than four countries, including India and Indonesia. Download 0.77 Mb. Share with your friends:
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