KARACHI, Sept 13: While playing a pioneering role in industrialization, Pakistan Investment and Development Corporation (PIDC) has prospered in good times and exhibited resilience to survive in bad times.

After three decades of precarious existence, the corporation is now working on a new mandate. It is to initiate, promote and co-sponsor joint public-private projects in the small and medium-sized sector.

PIDC came into being in 1952 to set up capital-intensive projects, with low returns, particularly in relatively backward and under-developed areas, in order to create employment opportunities and remove regional economic disparities.

By 1982, the corporation completed 94 projects. These included four fertilizer plants and three units each of gas transmission, ship-building, cement and heavy engineering besides 21 mining projects, 13 jute mills, 10 textile mills, eight sugar mills and six chemical plants. Over the years, 23 projects/units were privatized.

In early 1970s when the commanding heights of the national economy were seized by the state, the first Bhutto government, in a move to reorganize management of public enterprises, turned PIDC’s five major divisions into independent corporations and transferred some of its units to the provinces.

Having ceased to be a catalyst for promoting investment and industrialization and emasculated, PIDC struggled in the wilderness for nearly a quarter of a century for its survival. But hopes were raised when the corporation’s role was redefined in 1998. It’s new mission: to mobilize entrepreneurs and resources for joint venture projects under public-private sector partnership in selected sectors/segments preferably in small and medium enterprises.

Under the concept of public-private partnership, PIDC provides up to 50 per cent of the equity and prefers projects with costs ranging from Rs50-200 million with a commitment to disinvest its shares in 5-8 years.

So far, it has set up two joint venture projects: PIMA Foods (Pvt) Ltd which started its operations with export of mangoes in May 2002. The second is Malakand University (co-sponsored by NWFP government), located at the premises of Dir Forest Industries Complex, a unit of PIDC.

Under a MoU signed with a Saudi group, Kanooz Investment Company, PIDC proposes to set up a joint venture industrial park on a 250 acre plot in Korangi. Businesses would be provided either land or built-up space on rental basis with all facilities including self-generating electricity.

Finally, the PIDC has also launched a Business Support Centre that helps investors identify various government agencies involved with providing facility for new ventures. It arranges meetings to help resolve issues under one roof and also assists in feasibility studies and completion of official legal procedures and formalities.

Under the present government policy, it is not the business of the state to be in business. Decision-makers say they are providing the enabling environment for the private sector to seize the opportunity. Investors are shy to venture into new areas. They need official support to cut down on bureaucratic hassles and to reduce the cost of doing business.

The bank lending to SMEs has not gone beyond rhetorics. Given the right kind of financial support by the banks and the PIDC technical expertise, reinforced with agreements with foreign agencies, public-private partnership could be promoted for rapid development of SMEs.

In the current process of social exclusion in the mainstream economic activity (or capital-intensive projects), small and medium-sized industries which normally are labour-intensive, can generate much more employment. PIDC’s priority should be to promote labour-intensive SMEs.

Conscious of the role SMEs play in developing economies, PIDC chairman Zahid Husain organized last week a presentation on “promoting industrial development countrywide” which was attended, among others, by diplomats including Chinese Consul-General Sun Chun Ye and Secretary-General Islamic Chamber of Commerce Aqeel A. Al-Jaseem.

The Chinese diplomat said China was interested in setting up industrial parks and sought information on facility and tax incentives available in this respect. Aqeel A. Al-Jaseem announced that the third OIC task force meeting on SMEs would be held in the first quarter of 2004 in Pakistan. And the first lady chief guest in any PIDC function, the wife of Army Corps Commander, Karachi had words of encouragement for the corporation.