Saturday, May 14, 2016

Water, Water, Everywhere

GDP composition of sector & labour force by occupation in the form of any component to economy. The green, red, & blue components of the colours of the countries represent the percentages for the agriculture, industry, & services sectors, respectively.
(Wikipedia)

Introduction

The Pakistani Minister of Planning, National Reforms & Development, recently made a press statement about how he was trying to persuade our Chinese allies to set up 4 industrial parks along the China Pakistan Economic Corridor (CPEC) - 1 for each province - instead of 3. Apparently, he was overwhelmed with the motherly concern that leaving out any province in the beginning, may lead to inter-provincial friction (born of envy). Even though, nobody minded the location of the Haier-Ruba Economic Zone in Lahore. But intentions must always be accorded due respect, so bless his heart.

But, the fact that he brought up this endeavor during a meeting with the Chief Minister (CM) of Khyber Pakhtunkhwa (KP) & his delegation, gives the general public reason to believe that the Federal Government may be mulling over the possibility of re-hashing the zoning laws of KP to make room for some new industrial projects. Ordinarily, this would qualify as good news, but KP has a thriving agriculture sector that ought to be encouraged further, & is also currently involved in pursuing the ambitious Billion Tree Project. That would mean choosing stretches of land for new industrial zones might be a little more complicated than it would seem at first glance.

For a start, the logical course of action would be to familiarize ourselves with the definitions of the terms "industrial parks" & "zoning", courtesy Investopedia (investopedia.com):

DEFINITION of 'Industrial Park'

A portion of a city that is zoned for industrial use (as opposed to residential or commercial use). Industrial parks may contain oil refineries, ports, warehouses, distribution centers, chemical plants, plastics manufacturers, airports, food & beverage processors, & steel manufacturers, to name just a few examples. Some industrial parks offer tax incentives for businesses to locate there, such as tax increment financing.

BREAKING DOWN 'Industrial Park'

For example, the Wilmington Industrial Park in Los Angeles is located near a major international shipping facility (the Los Angeles & Long Beach ports), a railroad, & numerous freeways with access to major trucking routes. Types of businesses located there include cold-storage facilities, food distribution warehouses, engine parts companies & many others.

DEFINITION of 'Zoning'

Municipal or local government laws that dictate how real property can & cannot be used in certain areas. Zoning laws limit commercial use of land in order to prevent oil, manufacturing or other types of businesses from building in residential neighborhoods. However, these laws can be modified or suspended if construction of the property will serve to help the community advance economically.

BREAKING DOWN 'Zoning'

Parks, businesses & homes are all restricted under zoning laws. Zoning areas include industrial, light industrial, commercial, light commercial, agricultural, single-family residential, multi-unit residential & schools. In 1926, the Supreme Court ruled that properly drawn zoning ordinances were a valid exercise of the states' governing power. Zoning became constitutional by the U.S. supreme court as a result of the case Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 395 (1926).

KP-BOIT, Etc.

While the prospect of economic progress & prosperity in KP, is an extremely attractive proposition to the public at large, the first step towards marketing the idea of the Corridor as a way to encourage business alliances between genuine foreign investors & sincere local entrepreneurs, would be prohibitively slow, because people need to know how new alliances will make a quantifiable improvement in their lives before they embrace such changes. In that respect, the recent inauguration of the Khyber Pakhtunkhwa Board of Investment & Trade (KP-BOIT) is a step in the right direction. If handled properly, it could prove very valuable in the establishment & encouragement of progressive trade policies without riding rough-shod over the quality of life of the locals.

But, there is one strategy that always proves effective: Give the target market a taste of better things & they will do their utmost to make the supply of those things completely reliable & steady. Allow them that taste only once in a while & they will grow disenchanted with the project & drop it soon after. That isn't a result of "extremist or backward tendencies"; it is the normal human disgust for being toyed with. Therefore, the first order of business is to upgrade the range of affordable edibles freely & steadily available in the market.

An Unsettling Pattern (?)

For instance, there appears to be an unsettling pattern in the consumer goods market in KP. Unilever seems to be playing a very important role in this particular commercial segment. Just cast a glance over the product range this conglomerate offers in Pakistan:

Food & Drinks:-

1. Blue Band
2. Lipton
3. Rafhan
4. Wall's (including Magnum & Cornetto)

Personal Care:-

1. Clear - Anti-Dandruff Shampoo Range
2. Sunsilk - Shampoo Range
3. Lifebuoy - Shampoo & Soap
4. Lux - Soap, Hand & Bodywash
5. Close Up - Toothpaste
6. Fair & Lovely - Fairness Products
7. Pond's - Talcs & Beauty Creams
8. Rexona - Deos & Anti-Perspirants

Home Care:-

1. Comfort - Fabric Softeners
2. Rin - Detergent
3. Surf Excel - Detergent & Gentle Wash

Conclusion

These are all very popular products. But, in certain cases, sizeable percentages of the consumer public prefer competitor brands. A few of the most popular names that leap to mind are Fauji Group's Nurpur Butter, Snickers Marathon Energy Bars, L'Oreal's cosmetics, skin care & hair care products, P&G's skin care products & detergent selections, etc.

The purpose of the exercise is not to run any brand or product out of the market. It is to widen the consumer horizon by supplying a wide enough product range to the common man that he understands that commercial progress is not just something that looks good in budget statements & newspaper headlines; it is a very real & quantifiable improvement in his & his loved ones' quality of life.

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