KARACHI: Pakistan’s exports declined while regional countries export continuously growing, 5-zero rated export sectors should be treated as separate sector with separate utilities tariffs for power, gas and water in order to compete with regional competing countries, textile exporters and business people were of the view.
The representatives of Pakistan Apparel Forum (PAF), Pakistan Yarn Merchant Association (PYMA) and Pakistan Cotton Ginners Association (PCGA) were of the opinion that government should take immediate steps and measures to reduce the higher cost of production and costly industrial inputs, rationalise utilities tariffs bringing at par or less than utilities tariffs in regional countries and arrangements for swift refunds to mitigate liquidity crunch as they were the main factors for decline in exports.
Due to high cost of doing business and severest ever liquidity crunch, export oriented industry which grew up in 15 to 20 years, currently facing multiple challenges. For viability of export-oriented industry, they demanded the government to fix cost of all inputs for exporting sector on a yearly basis in line with the tariffs offered in the competing countries with a view to help the value added textile sector become competitive in the world markets. Moreover, the government should sanction a separate status and accord high priority to supply gas to export-oriented textile manufacturing to uplift exports.
Jawed Bilwani Chairman of PAF said 12.24 percent negative growth of textile exports in May 2017 as compared to last year in same month was alarming.
Bilwani voiced that government should take responsibility to find the factors behind export decline and address the root causes. Textile exports has faced downfall amid excessive delays in refunds of billions of rupees to exporters, unbridled high cost of utilities and production and unviable business environment.
He said knitwear which tops in exports of textile group faced a negative growth 1.84 percent and its export during July-May 2017 were $2.10 billion as compared to $2.14 billion in July-May 2016.
Bilwani articulated that to achieve the export targets set by the government it is crucial to provide enabling and favourable business environment and foremost to curtail the cost of inputs-electricity, gas, minimum wages and water rates and close to rates prevailing in regional competitor countries.
To provide more breathing space it is also inevitable that billions of rupees refunds to exporters be released on priority basis, in addition to incentives announced under Prime Minister’s Export package.
He urged the government to execute practical steps and measures to downward revise the tariffs of electricity, gas, water, determination of minimum wages slabs at par with the regional competing countries. The current economic indicators of doing business reflect improvement, however, to achieve a major breakthrough it is crucial that the value-added textile export and five zero-rated exports sectors be facilitated and introduced with separate rationalized energy tariffs.
Pakistan Bureau of Statistics stated textile exports faced a downfall by 12.24 percent in May 2017 as compared to export in same month last year. While the exports in May 2017 decreased by 8.47 percent as compared with previous month. Likewise, textile group exports have been recorded $11.23 billion from July-May 2016-17 as compared to $11.46 billion in July-May 2015-16 with a negative growth of 1.98 percent, Ghulam Rabbani of PYMA was of the opinion.
During PMLN-led governments, exports in year 2012-13 were $24.5 billion where in textile exports were $12.8 billion, and in year 2015-16 exports saw a drastic decline with total exports of $20.8 billion in which textile exports were worth $12.4 billion.
Likewise, exports saw a sharp decline of 15 percent in general and 3 percent decline in textile exports in particular. If the government failed to pay deserving attention, the export can further decline to 8 percent.
Amid multiplicity of problems and issues confronting to the value-added textile export sector of Pakistan, the major issue hampering its export viability pace are harsh liquidity crunch in wake of delays of refunds on part of government, high power and gas tariffs, as compared to the industry of regional competing countries.
Government should take serious note on export decline and take immediate steps to incentivize exporters to enhance exports and take instant steps to release incentives under PM Export Package, refunds the claims of textile exporters, curtail the cost of inputs.
Delays in incentives under Prime Minister Export Package and 10-day suspension of export activities due to ban on movement of heavy traffic in Karachi by Sindh High Court has also affected exports.
Published in Daily Times, June 25th, 2017.