Chapter 9: Secondary and Tertiary Industries

Secondary Industries
 Definition: Industries that process raw materials into finished or semi-finished goods, encompassing
manufacturing and construction sectors.
 Key Sectors:
o Textile Industry:
 Significance: Accounts for approximately 60% of Pakistan's total exports, serving as a
cornerstone of the national economy.
 Products: Diverse range including cotton yarn, fabrics, ready-made garments, bed linens,
and towels.
 Major Centers: Prominent cities such as Karachi, Faisalabad, Lahore, and Sialkot.
 Challenges:
 Persistent energy crises leading to production interruptions.
 Intense competition from countries like Bangladesh and Vietnam.
 Reliance on imported machinery affecting cost efficiency.
 Volatile cotton prices impacting raw material expenses.
o Cement Industry:
 Significance: Crucial for infrastructure development; Pakistan stands as a leading cement
producer in the region.
 Raw Materials: Primarily limestone, clay, and gypsum.
 Major Plants: Located in districts such as Dera Ghazi Khan, Karachi, and Chakwal.
 Challenges:
 Elevated production costs due to high energy consumption.
 Environmental concerns related to emissions and ecological footprint.
 Overcapacity issues leading to competitive pricing pressures.
o Sugar Industry:
 Significance: Processes sugarcane into refined sugar, playing a vital role in the agrarian
economy.
 Major Centers: Regions in Punjab (e.g., Rahim Yar Khan, Faisalabad) and Sindh (e.g.,
Badin, Thatta).
 Challenges:
 Irregular sugarcane supply stemming from water shortages and climatic factors.
 Delayed payments to farmers causing financial strain and unrest.
  Government-imposed price controls affecting industry profitability.
o Fertilizer Industry:
 Significance: Supports agriculture by providing essential nutrients; Pakistan is self-
sufficient in urea production.
 Major Plants: Situated in areas like Daharki, Multan, and Faisalabad.
 Challenges:
 Natural gas supply shortages impacting production capacity.
 Stringent environmental regulations concerning emissions and waste
management.
 Competition from imported fertilizers affecting market share.
Factors Influencing Industrial Location:
 Raw Material Proximity: Close access reduces transportation costs and ensures timely supply (e.g.,
textile mills near cotton-growing regions).
 Energy Availability: Reliable power sources are crucial; many industries are established near major
power plants or energy hubs.
 Transportation Infrastructure: Access to efficient roads, railways, and ports facilitates distribution
and logistics.
 Labor Supply: Availability of skilled and unskilled labor influences industrial location decisions.
 Market Accessibility: Proximity to urban centers and markets reduces distribution costs and enhances
market reach.
Environmental Impacts:
 Pollution: Industrial activities contribute to air and water pollution through emissions and effluents.
 Resource Depletion: Overexploitation of natural resources, including water and raw materials.
 Waste Management: Challenges in responsibly managing and disposing of industrial waste.
Tertiary Industries
 Definition: Service-oriented industries that provide intangible goods and services to consumers and
businesses, encompassing sectors like banking, transportation, education, and healthcare.
 Key Sectors:
o Banking and Finance:
 Significance: Facilitates economic activities through financial services, including
lending, investment, and wealth management.
 Institutions: Central bank (State Bank of Pakistan), commercial banks (e.g., HBL, UBL),
and microfinance institutions.
 Challenges:
  Promoting financial inclusion, especially in rural and underserved areas.
 Managing non-performing loans to maintain financial stability.
 Ensuring regulatory compliance and strengthening governance frameworks.
o Transport and Communication:
 Significance: Enables the movement of goods and people; essential for trade, commerce,
and daily life.
 Modes of Transport:
 Road Transport: Extensive network of national highways (e.g., N-5) connecting
major cities and facilitating inland trade.
 Railways: Operated by Pakistan Railways, offering passenger and freight services
across the country.
 Air Transport: International and domestic flights operating from airports in
major cities (e.g., Jinnah International Airport in Karachi).
 Sea Transport: Maritime trade facilitated through ports like Karachi Chapter
10: Trade
 Definition: Trade involves the exchange of goods and services between countries
(international trade) or within a country (domestic trade).
 Importance of Trade to Pakistan:
 Economic Growth: Trade contributes significantly to Pakistan's GDP by
providing markets for surplus production and access to essential imports.
 Employment: Generates jobs in various sectors, including manufacturing,
agriculture, and services, thereby reducing unemployment rates.
 Foreign Exchange Earnings: Exports provide foreign currency, which is crucial
for importing goods and services not produced domestically.
 Major Exports:
 Textiles and Garments: Pakistan is renowned for its textile products, including
cotton yarn, fabrics, and ready-made garments.
 Agricultural Products: Key exports include rice (notably Basmati), fruits (such
as mangoes and citrus), and vegetables.
 Sports Goods: Sialkot is famous for producing high-quality sports equipment,
including footballs and cricket gear.
 Leather Products: Export of leather goods like footwear, jackets, and
accessories.
 Major Imports:
 Petroleum Products: Crude oil and refined petroleum are significant imports due
to domestic energy needs.
 Machinery and Equipment: Industrial machinery, electrical equipment, and
appliances to support various sectors.
 Chemicals and Pharmaceuticals: Essential for the agricultural and health
sectors.
 Edible Oils: Palm oil and soybean oil to meet dietary consumption.
 Trade Partners:
 Export Destinations:
 United States
 European Union countries
 China
 Afghanistan
 Import Sources:
 China
 United Arab Emirates
 Saudi Arabia
 United States
 Balance of Trade:
 Definition: The difference between the value of a country's exports and imports.
 Pakistan's Scenario: Historically, Pakistan has faced a trade deficit, where
imports exceed exports, leading to economic challenges.
 Factors Affecting Trade:
 Exchange Rates: Fluctuations can make exports cheaper or more expensive for
foreign buyers.
 Trade Policies: Tariffs, quotas, and trade agreements influence the flow of goods
and services.
 Global Demand: Changes in international markets affect the demand for
Pakistan's exports.
 Infrastructure: Efficient ports, transportation, and logistics are vital for smooth
trade operations.
 Challenges in Trade:
 Energy Shortages: Affecting industrial production and export capacity.
 Political Instability: Deterring foreign investment and complicating trade
relations.
  Lack of Diversification: Over-reliance on a few export products makes the
economy vulnerable to global market fluctuations.
 Compliance with International Standards: Meeting quality and safety
standards to access and maintain foreign markets.
 Strategies to Improve Trade:
 Diversifying Export Base: Encouraging the production and export of a wider
range of goods and services.
 Enhancing Product Quality: Investing in technology and skills to improve the
competitiveness of exports.
 Exploring New Markets: Identifying and establishing trade relations with
emerging economies.
 Improving Trade Facilitation: Streamlining customs procedures and reducing
bureaucratic hurdles.
 Port and Gwadar Port.
 Communication:
 Telecommunications: Rapid growth in mobile phone usage; major service
providers include PTCL, Jazz, and Telenor.
 Internet Services: Increasing penetration with ongoing challenges in

Chapter 9: Secondary and Tertiary Industries

Key Definitions:
 Secondary Industry: Industries that process raw materials into finished or semi-finished goods,
including manufacturing and construction sectors.
 Tertiary Industry: Service-oriented industries that provide intangible goods and services to consumers
and businesses, such as banking, transportation, education, and healthcare.
 Industrialization: The process by which an economy transforms from primarily agricultural to one
based on the manufacturing of goods.
 Gross Domestic Product (GDP): The total value of goods produced and services provided in a country
during one year.
Relevant Formulas:
 Contribution of a Sector to GDP:
Sector Contribution (%)=(Value Added by the SectorTotal GDP)×100\text{Sector Contribution (\%)} = \left( \
frac{\text{Value Added by the Sector}}{\text{Total GDP}} \right) \times
100Sector Contribution (%)=(Total GDPValue Added by the Sector)×100
Example: If the manufacturing sector adds value of $50 billion to the economy and the total GDP is $200
billion:
(50200)×100=25%\left( \frac{50}{200} \right) \times 100 = 25\%(20050)×100=25%
This indicates that the manufacturing sector contributes 25% to the GDP.
Chapter 10: Trade
Key Definitions:
 Trade: The exchange of goods and services between entities or countries.
 Balance of Trade: The difference between the value of a country's exports and imports over a certain
period.
 Trade Deficit: Occurs when a country's imports exceed its exports.
 Trade Surplus: Occurs when a country's exports exceed its imports.
 Tariff: A tax imposed on imported goods and services.
 Quota: A limit on the quantity of a particular good that can be imported or exported.
Relevant Formulas:
 Balance of Trade Calculation:
Balance of Trade=Total Exports−Total Imports\text{Balance of Trade} = \text{Total Exports} - \text{Total
Imports}Balance of Trade=Total Exports−Total Imports
Example: If Pakistan's total exports are valued at $25 billion and total imports are $30 billion:
25 billion−30 billion=−5 billion25\, \text{billion} - 30\, \text{billion} = -5\, \
text{billion}25billion−30billion=−5billion
This indicates a trade deficit of $5 billion.
 Exchange Rate Impact on Trade:
While there isn't a direct formula, it's important to understand that:
o A depreciated currency makes exports cheaper and imports more expensive.
o An appreciated currency makes exports more expensive and imports cheaper