Big business is crumbling, and for obvious reasons. Last week the Pakistan Business Council (PBC) called for an urgent economic stimulus to help the industrial sector fight the impact of coronavirus. Its proposal sought reduction in policy rate, elimination of restrictions on imports for industrial inputs, demanded zero rating for exports sector again, and release of tax refunds. While many of their concerns are valid and a lot of their demands were subsequently met, one wonders, in times of a globally devastating pandemic when everyone is on high-alert, what role do Pakistani businesses want to play beyond business as usual? Because, surely if they had really thought about it, this is the time for them to shine.
And some are indeed doing just that. They are shinning. As most automotive OEMs are shutting down plants because of the dual effect of lockdown and a carried forward effect of demand slump, auto parts manufacturers are coming together in a big way. Over the past week as the COVID-19 outbreak spread its talons across the country, auto parts makers have been working to develop ventilators. Representative of auto parts manufacturers, Almas Hyder told BR Research that the industry has tremendous capacity, has skilled labor, has inputs that can be imported and sourced locally and has the technology as well, which is open-source.
This is a global understanding. As automakers around the world shut down plants, pledges to make medical equipment started to come through. Ford, General Motors, Toyota and Tesla announced they would help. Meanwhile, President Donald Trump invoked the Defense Production Act and required GM to "accept, perform, and prioritize" federal contracts for ventilators. The company now believes that by May, there will be hundreds of thousands of ventilators being built across the world by different suppliers, not just GM. They are right.
It’s not just ventilators. It is other medical equipment including defibrillator monitors, N95 masks, disposal medical masks, medical protective clothing and gear, and COVID-19 testing kits. In fact, a lot of countries that have ramped up testing—something that is direly needed to truly grasp the extent of the outbreak and subsequently tackle it—are also making their own testing kits (read more: “Pakistan lockdown: Sophie’s choice”, March 26, 2020).
The auto parts industry can make 10,000 ventilators in the first six months, and can produce double that volume and can also export this important piece of medical equipment abroad. BR Research is told that the first ventilator is being designed by Millat Tractors and the Drug Regulatory Authority of Pakistan (DRAP) has been persuaded to test and approve the design within 10 days of the production of the prototype which will be done by April. There are still concerns about standards, safety and testing which DRAP will have to expedite and ensure as regulatory efficiency is critical at this point.
But this is one industry and one equipment. Where are the make-in-Pakistan strategy proposals from the likes of PBC and industrial associations? Yesterday, China sent Pakistan supplies of masks and medical equipment including testing kits. More might come and we certainly need all the aid. But why are local manufacturers not chipping in? It is definitely not difficult. Global businesses are recalibrating.
Assemblers of iPhones in China are making face masks. French LVMH is making hand sanitizers, Zara, one of the biggest clothing chain is making hospital scrubs and as earlier mentioned, carmakers are ready to manufacture ventilators. Not everyone can make everything. Medical equipment specially requires certain command over technology, standards in place and different skill sets. Businesses are focusing on making products that are closest to their current capabilities.
Pakistan currently exports different varieties of textile, disinfectants and sterilization products. According to World Health Organization (WHO), Personal Protective Equipment (PPEs) is in shortage and one of the most urgent of needs across the world. This is a huge space for Pakistani businesses to leverage, and there are certainly other areas worth exploring.
The point is simple and it is this: private sector needs to play a much bigger role here. This is as much a business opportunity as it is a responsibility. If there ever were a time to push the government to bring pro-business policies, it is now. The time to “make in Pakistan” is here.