Although Pakistan has huge material resources, a young, bright and lively population and has been included within the “next eleven” economies in the world regarding its potential, its industry is in a pitiful state, since its creation. The so-called industrial growth of the sixties and seventies was of basic and simple industry, without laying the basis for heavy industry. Growth rate of industry fell from 8.2% in 1980’s to 4.8 % for the 1990’s and in the latter half of 1990’s the growth was only 3.2%. In 1996/7 the growth for industrial sector was minus 0.1%, and was 1.5% in 1999/2000. Private investment fell from 10% to 8% during the 1990’s, though foreign ownership of industry has surged, as reflected in the Foreign Direct Investment (FDI) figures. Gross fixed capital formation in private sector in the large scale manufacturing sector fell continuously over the 1990s, by as much as 60%. And successive rulers facilitated foreign companies in establishing industry, such as extraction plants, refineries and power generation and taking their huge profits abroad, whilst obstructing local private companies through requirements such as obtaining 22 NOCs (No Objection Certificates) to install even a medium size industry. In addition, tariff rates have fallen drastically from a maximum of 225% in 1986 to less than 20% making it easier for Western companies to flood our markets. So, it is not surprising today that thousands of industrial units have been declared sick and overall local industrial production is at an all-time low, with foreign multinational companies strengthening their hold on our economy.
بسم الله الرحمن الرحيم
Hizb ut-Tahrir Wilayah Pakistan has issued a Publicized Policy Position (PPP) regarding the subject of establishing the industrial requirements for the Khilafah as the world’s leading state.
May 2013 CE – Rajab 1434 AH
Preamble: Pakistan has been denied its industrial potential through colonialist policies imposed by democracy and dictatorship alike
A1. Although Pakistan has huge material resources, a young, bright and lively population and has been included within the “next eleven” economies in the world regarding its potential, its industry is in a pitiful state, since its creation. The so-called industrial growth of the sixties and seventies was of basic and simple industry, without laying the basis for heavy industry. Growth rate of industry fell from 8.2% in 1980’s to 4.8 % for the 1990’s and in the latter half of 1990’s the growth was only 3.2%. In 1996/7 the growth for industrial sector was minus 0.1%, and was 1.5% in 1999/2000. Private investment fell from 10% to 8% during the 1990’s, though foreign ownership of industry has surged, as reflected in the Foreign Direct Investment (FDI) figures. Gross fixed capital formation in private sector in the large scale manufacturing sector fell continuously over the 1990s, by as much as 60%. And successive rulers facilitated foreign companies in establishing industry, such as extraction plants, refineries and power generation and taking their huge profits abroad, whilst obstructing local private companies through requirements such as obtaining 22 NOCs (No Objection Certificates) to install even a medium size industry. In addition, tariff rates have fallen drastically from a maximum of 225% in 1986 to less than 20% making it easier for Western companies to flood our markets. So, it is not surprising today that thousands of industrial units have been declared sick and overall local industrial production is at an all-time low, with foreign multinational companies strengthening their hold on our economy.
A2. Democracy will never allow Pakistan to achieve its potential because it is what implements the Western colonialist policies. Intent on exploiting the world resources, colonialist powers want to keep Pakistan a state with poor industry, unable to extract its resources by itself, devoid of heavy industry such as engine and jet engine manufacture, dependent on import of even simple agricultural machinery, provider of cheap light industry products for Western markets such as electric fans, surgical equipment, hand craft and sports goods, as well as making Pakistan’s population a huge market for Western products. Widespread unemployment, expensive goods, dependence on the West for weapons technology, brain drain of brilliant sons and daughters to the West are just a few symptoms of this deeply seated colonial program. This colonialist policy is being implemented since the time of East India Company and is implemented today through democracy, which is just a rubber stamp for the colonialist policies of the World Bank and IMF.
B. Political Considerations: Removing the locks and fetters to the industrial resurgence of the Ummah
B1. Establishment of a powerful industry mandates a focus on military industry. America and China are the world’s foremost industrial powers because both have an orientation to war industries, including cutting edge stealth, supercomputers and space technologies. Germany and Japan’s pre-World War II military orientation has benefited their industrial development until now, with their mammoth car industries being a development of their immense tank, armored personnel and jet engine manufacturing experience. Much of the innovation in consumer products are byproducts of military/ space technology, including goods as mundane as kitchen appliances, such as the Teflon on frying pans and internet systems for regulating home appliances. However, due to colonialism, despite the fact that Pakistan achieved nuclear weaponry, it has been denied a powerful industry, with its armed forces dependent on military technology from belligerent colonialist states and vital areas of its economy dependent on foreign products and technologies, from telecommunications to engines and heavy machinery.
B2. Industry has fluctuated between forced privatization and nationalization and both policies have led to immense suffering. So, socialist or communist states have advocated indiscriminate, whole-scale nationalization of industry, to address the problem of concentration of wealth in the hands of a few. However, this man-made narrow solution curbed the natural urge for wealth, which stimulates responsibility and innovation. At the other extreme there is capitalism, which advocates universal private ownership. It cares not for whether the ownership is of resources from which the public has need and must not be deprived of or sensitive, strategic, capital intensive industries, in which the state should dominate. So in addition to the immense concentration of wealth in the hands of a few capitalists, these capitalists act as lobbies to dictate foreign policy objectives to the state, waging war on resource rich nations, such as the Muslim countries.
B3. Research and development and heavy industry have a co-dependent relationship, but both are driven by the vision to be the leading state. America the world’s superpower strove to be the world’s leading state which resulted in its establishing a substantial heavy industry. It even sought out foreign scientists, such as German rocket engineers and established universities to progress in technology. America enjoys some of what the Khilafah achieved for centuries, where the Khilafah’s universities were the favored destination for the European elite, Arabic was the world’s language of science and technology; and the Khilafah’s industry and weaponry were the cause of awe throughout the world. Whereas in Pakistan today, there is a huge brain drain as intelligent well-qualified individuals seek countries where their skills are of immediate and practical use.
B4. If seeking to be the leading state is the engine for growth of heavy industry, such as manufacture of engine and industrial machinery, then state and private financing are part of its fuel. Despite the immense wealth in the country, including trillions of rupees locked away from industrial investment in banks and stock markets, the agent rulers took loans from the colonialists with conditions to prevent substantial local industrial development in both private and state sectors.
C. Legal Injunctions: Establishing industrial might for the leading state of the world
C1. From the first day of the return of the Khilafah, the Islamic State will strive to become the leading state, unmatched by any rival, as it was before. Regarding industry, it will have a military focus, which will lead to the rapid development of a heavy industrial base
In its Introduction to the Constitution, Hizb ut-Tahrir has adopted Article 74, “The Department of Industry is in charge of all the affairs connected to industry, whether heavy industry such as the manufacturing of engines, machines, vehicles, materials and electrical equipment, or light industry. Similarly, whether the factories are of the public property type or they are included in the private property and have a relationship to the military industry. All types of factories must be established upon the basis of military policy… it is a duty upon the State to manufacture weapons by itself and it is not allowed to depend upon other states, because this allows other states to control it, its will, its weapons and its fighting… This can’t be achieved unless the State possesses heavy industry and started to build factories which produce heavy industry, both military and non-military alike.”
C2. Regarding the nationalization and privatization dilemma, Islam as the world’s true revealed Deen has solved this problem from its root. Public resources such as abundant minerals, fuel resources and energy forms such as electricity are publicly owned. Their revenue and utilization is for the entire public and the State ensures this matter. Factories that manage public resources are also considered public property. Such factories will neither be state or private. This would include coal, gold, copper and bauxite extraction plants, gas refineries and electricity production plants and distribution networks. Such public resource related factories can never be privatized or nationalized, so private industry would benefit from cheap raw materials and energy. In addition, that which can be privately owned cannot be nationalized or made as a public property.
In its Introduction to the Constitution, Hizb ut-Tahrir has adopted in Article 138, “Factories by their nature are private property. However, they follow the rule of the product that they are producing. If the product is private property then the factory is considered to be private property, such as textile factories. If the product is public property then the factory is considered public property, such as factories for iron ore production.” And in Article 139, it is stated “The State is not permitted to transfer private property into public property, since public property is confirmed by the nature and characteristic of wealth and not by the opinion of the State. Based upon this, what is called nationalisation is not from the Shari’ah in any shape or form.” And in Article 140, it is written “Every individual from the Ummah has the right to utilise anything from public property, and it is not allowed for the State to permit someone to individually possess or utilise it.”
Also in its Introduction to the Constitution, Hizb ut-Tahrir has adopted Article 74, “Thus it is necessary that the State has factories for producing all types of atomic weapons, rockets, satellites, airplanes, tanks, mortars, naval ships, armored vehicles and all types of heavy and light weapons. It is necessary that the State has factories which produce machines, motors, materials, and electronics, and factories which have a relation with public property and light factories which have relation with the military or war industries.”
C3. Regarding research and development, the state must ensure that there are facilities that secure the Khilafah industry as being a world leader. This will involve great investment by the state, linking industry to university research, to meet the state’s requirements for engineers, architects, town planners, doctors, educationalists and agricultural scientists and so on. In addition the state will encourage private institutions to play their role in research and development.
In its Introduction to the Constitution, Hizb ut-Tahrir has adopted Article 162, “All individual subjects of the State have the right to establish scientific research laboratories connected to life issues, and the State must also establish such laboratories.”
C4. Regarding funding of industrial development, by restoring the public properties to public ownership and ensuring strong state ownership of essential industries, as well as implementing other Shariah rules regarding revenues, the state will be able to finance industrial development through the state and private sector without dependency on other nations and their restrictive conditions. This will allow the State to become self-sufficient regarding matters such as military technology, clothing, housing, education and health. Foreign trade will be with those countries that are not belligerent and will be undertaken in a way so as not to strengthen them to resist the call to Islam, as ultimately Islam is to be implemented over the entire world.
In its Introduction to the Constitution, Hizb ut-Tahrir has adopted Article 165, “Development and investment by foreign funds within the State are forbidden. It is also prohibited to grant franchises to foreigners.”
Note: Please refer to the following articles of Hizb ut Tahrir’s Introduction to the Constitution for the complete evidences from Quran and Sunnah: 74, 138, 139, 162, 165.
D. POLICY: The Khilafah as the industrial marvel of the world
D1. A powerful and diverse industry driven by the objective of being the world’s leading state, with the war industry as the leading edge of industrial development.
D2. Public ownership of industry related to public resources, state and private ownership of essential industries that ensure the circulation of wealth in society, whilst maintaining optimal innovation, diversity and creativity.
D3. Establishing strong industrial research and development by the state and through the private sector with significant state support.
D4. Ending colonialist loans with their destructive conditions, by replacing them with Shariah based revenue generation, including public ownership of the immense wealth such as oil and gas.
Hizb ut-Tahrir Wilayah Pakistan
10 Rajab 1434 AH
20 May 2013 CE