Deletion Program – bring it back
Now that lots of automobile and other industrial manufacturers are entering Pakistani market, I feel its high time the government should re-introduce the deletion program.
A while ago Pakistan used to follow a deletion program to gradually acquire technology of manufacturing industrial machinery and equipment and consumer durables. With WTCO Pakistan had to let go of its deletion program which was not ideal but still did help local manufacturers and vendors of industrial and consumer machinery and equipment.
As per a “Ravi Magazine” report of December 01, 2017
The half-hearted indigenous production of parts and machinery or the deletion program aimed at smooth transfer of technology has so far achieved 100% deletion in tractor industries; 95% in electric pumps; 100% in electric motors, 84% in tractors; 85% in electric meters; 80% in deep freezers. 75% in switchgear. 79% in sugar plants; 70% in motorcycles and 61% in packaged air conditioners. ”
Now that lots of automobile and other industrial manufacturers are entering Pakistani market, I feel its high time the government should re-introduce the deletion program.
A common person in Pakistan, even a highly educated one, may not be aware what a deletion program was, who it was for, what did it do and why was it designed and implemented and what were the benefits or losses to Pakistan due to the same. However, deletion program played a very important role in creating employment, improving the size and quality of local industry and in bringing the local industry at par with the international standards.
During their initial few years of introducing their durable machinery equipment and or appliances international companies just import their finished goods into Pakistan and sell the same thru local importers and/or distributors. However, they soon realize that to remain competitive they need to start local value addition in Pakistan, hence they start local assembly, wherein a CKD (complete knocked down) unit is imported into Pakistan and is assembled locally. For Pakistan it is a step above over importing fully manufactured and finished goods as local assembly provide skills, trainings, and jobs to local people. To maintain a strong control on their product development the manufacturer’s interest is to keep the local value addition to as less as possible.
But from host country’s (Pakistan’s) perspective it is in its interest to increase the level of local value addition as much as possible and as soon as possible. As much as Pakistani government wants foreign companies investing in Pakistan it does not want to offer a free access to them, to exploit Pakistani consumers.
That is where a “deletion program” came into play. To attract foreign investment and in return of allowing the supplier access to Pakistani market the government gave them certain concessions on a short-term basis. However, to safeguard and benefit the local industry and economy the government also puts certain conditions and restriction on them. An agreement of these concessions, conditions and restrictions and a plan of gradual and incremental local value addition and time frame for the overall process was called “Deletion Program”.
Let us start with an example of cars.
When the car manufacturer decides to start local value addition, they explain to the government that
- this is a capital-intensive project that requires a lot of funding and without certain concessions they cannot start this big project
- Also, that this is entirely a new technology for Pakistan, they cannot find necessary machinery, equipment, and tools
- They need to import all above in CKD (Complete Knocked Down) Kit so need concessions in import related duties to remain viable
- They also cannot find local skilled resources for running and supporting their plans so need to hire human resources from their own country, they need certain permits and concession for them
- Also, since it is a new product local value addition in Pakistan will be at a minimum
Pakistani government need their investment, their technology, and their expertise so it offers them the needed concessions and but expect them the following
- They can start their operations in the form of an assembly plant with CKD
- Within X number of years of starting their local assembly they will identify opportunities for local value addition
- Objective will be that the local component can continue increasing and foreign component continue decreasing every year
- To support and increase local value addition they will train the local resources and transfer them necessary designs, drawing and expertise so the local industry can come up to their standards
- By continuing the above activities local component will increase by 15% (say) every year
- So eventually by the end of X years almost 90% value of the cars will be local component and 10% will be foreign component
The above constitutes a deletion program, and if it were followed as planned it should have following benefits:
- Local vendor industry development
- Skills, training, and jobs opportunities for local people
- Competitive prices of finished goods for local consumers
- Cross selling of parts and components to other manufacturers
- Export opportunities of parts and components to other countries
- Opportunity for local brands developments
- Downstream spiral economic benefits
Due to various reasons, corruption being a major and important one, companies did not follow the deletion programs and the country could not benefit from the same as much as it could have. But now that the present government seriously intents to revamp the industry and economy it should revisit the idea of implementing deletion programs for foreign investors and ensure it gets implemented in its true sense by addressing the gaps and loopholes.
Note: The writer has worked in an environment where deletion program was made to fail by corrupting relevant authorities.
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Babar Saeed
April 05, 2021

The writer is a professional marketer and engineer with good work exposure to governments, and businesses and industries in the private sector in several countries. Idea is to take the first step in adding value to anything that one gets exposed to instead of just complaining about the same.