Here's Why Hyundai Setting Up A Plant In Pakistan Is Problematic

By Alveena Jadoon | 30 Jul, 2018

In developing nations, one of the largest concerns should be the influx of global culture and products, the pace of growth that phenomenon introduces and whether or not it is planned effectively to actually be beneficial for the citizens of the country.

The globalization paradigm has helped a number of countries exploit the markets of the developing nations, benefit from the cheap labor and work without any concerns for the impact on the economy, the environment, and the labor

And mind you, these are generally places where labor laws are not that strong to protect the interests of the labor, the industrialization phenomenon has kicked in recently and the market is still growing on a trial and error basis. It allows for many foreign industrialists and investors to capitalize the infancy of the economy and laws in the country.


A recent example of this is the influx of Hyundai cars into the Pakistani market. The South Korean manufacturer has partnered with a local group, The Nishat Group, to set up a plant in Faisalabad. Faisalabad is generally known to be the hub of business activity in Pakistan

In the last couple of years, we have witnessed an increase in the number of Japanese cars in Pakistan. Manufacturers, as a result, are quite interested in setting up plants here because the market for these cars already exists. According to news sources, French carmaker Renault and South Korea’s Kia are also considering joining the bandwagon of setting up plants in the country. Hyundai plans to produce around 7000 units in the first year.

There is no denying that there is an upward trajectory in Pakistan’s population growth along with economic growth. This means that many more people now and in the future will be inclined to get automobiles and there is already a preference for Japanese cars in the market. This is why the former government introduced the five-year auto-policy. This policy granted several incentives to foreign investors eager to capitalize the needs of the growing population.

While foreign investment such as this is good news for local investors and the economy, there are several aspects which need to be considered before venturing into such deals

The responsibility lies with the government, which at this point does not consider holistic policies and that will ultimately come back to haunt Pakistan.

If we just take the examples of bigger cities like Karachi, Lahore, and Islamabad; we will realize that the growing number of automobiles on the roads is causing a huge problem for the population. The increase in the number of cars on the roads might imply that people are inclined towards buying/leasing cars, however, it also shows the lack of planning when it comes to public transport.


Despite efforts to modernize economic hubs of the country, no attention has been given to improve the layout of the public transport

There is definitely an introduction of the metro bus project, however, that project is also limited and targeted to a certain class and has not seeped into the developed side of the cities where people should actually be pushed to use public transport.

At the same time, if we are allowing more cars on our roads; it would be a great idea if we can plan our cities and the infrastructure accordingly

An example of this is the beautiful city of Abbottabad, home to PMA, in the north. The city is entrenched in its old ways and system of living. The houses, the markets, the prayer places and the cemeteries are all knit together. The roads are old and narrow. In the recent past, there has been an influx of cars into the city but the city has not been planned to accommodate these cars on its narrow roads, which results in hours-long traffic jams and extreme inconvenience for the public. The KP government recently introduced a bus service for women in Abbottabad. While the initiative and the thought behind it is a concern for the population, what’s lacking in the initiative is the plan to execute it. At this point, introducing more buses on the roads of Abbottabad means choking the traffic because work needs to be done on improving the roads and creating spaces that accommodate buses.

Another important concern is that when we allow such policies, we need to take into account each and every aspect because policies which are not holistic never work.


If we are allowing the influx of cars, we also need to work on improving the roads which these cars are going to run on. Without improving the basic setup, we cannot work out a plan

This is the same problem which is plaguing CPEC at this point. The entire plan depends on trucks carrying goods from one part of Pakistan to the other, but these trucks are ages old along with the roads that they travel on. And this alone is a huge loophole in the mega project.

The last and the most important concern which cannot and should not be neglected is the environmental impact that this policy will have

Our country is already suffering endlessly because of the gross neglect towards the environment. The heatwaves have increased and flooding is a threat every year during the monsoon. If we allow more cars on our roads, we are not on the right path. We need to keep the emissions in check and protect Pakistan from being adversely affected by a threat as imminent as climate change.




cover image via pricedekhlo

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