Daily Times

KARACHI: The cost of electricity for export-oriented industrial sector in Pakistan is around 86 percent higher than Sri Lankan electricity tariff and more than 45 percent higher than India and Bangladesh, said industrial and manufacturing exporters of value-added products.

”Gas price is 173 percent higher than Bangladesh and 44.2 percent higher than India and even our gas price is 90 percent higher than United States, which is one of our biggest buyers of textile and leather products,” the traders remarked.

They questioned when there was such a great difference in the essential inputs in the manufacturing of value-added textiles and leather – the two prime exports of Pakistan as compared to regional competing countries, then how the government was expecting to improve exports by holding meeting without any practical decision to facilitate exporters.

During July to November, exports of textile declined by 8.40 percent to $5.233 billion from $5.713 billion in the same period last year, they observed, adding in the first five months of current fiscal year, Pakistan has suffered a loss of Rs 50.32 billion in textile export earnings and approximately 60,000 employees have lost their jobs, which was indeed a most alarming situation for think tanks and policy makers in the government.

Total exports witnessed a decline of 13.88 percent to $8.534 billion during the period under review from $9.909 billion due to which Pakistan has suffered a total loss of Rs 144 billion in total export earnings, they highlighted. The industrialists said it seems government is solely interested to increase the exports of raw material which is really a great irony because all over the world, the exports of raw material are discouraged while the exports of value-added goods, which fetch higher foreign exchange with value addition are encouraged.

Talking to Daily Times, Value-added Textile Forum chief coordinator Jawed Bilwani and Agha Saiddain, a senior member of Pakistan Tanners Association, said the value-added sector requires a level playing field to compete with regional rivals, but due to the rising cost of manufacturing, the grievances of exporters, especially those producing finished goods, are reaching new heights. Pakistan leather sector registered a decline of 1.71 percent in its export during January to November 2015, while countries – such as China, India and Bangladesh registered considerable increase of 4 percent, 18 percent and 32 percent respectively in their leather exports, they added.

“Per unit cost of electricity in Bangladesh is 7.3 cents, China 8.5 cents, India 9 cents, while in Pakistan it is 14 cents. The Commerce, Finance and Textile Ministry should understand until and unless the major causes were not addressed, and the grievances in terms of cost of doing business are not evaluated in comparison with regional competing countries, our exports will never increase and plummet further, which would ultimately lead to large numbers of closure of the export-oriented industries resulting in mass unemployment leading to chaos and serious law and order situation,” they emphasised.

They regretted the government is not paying much heed towards the value-added textile and leather sectors whose share in overall exports is around more than 75 percent, and which provides jobs to more than 28 million industrial workers. They alleged perhaps the government does not want the exports of these sectors to flourish, but on the contrary it wants to support the exports of raw material.

The exports of textile and leather industry did not remarkably improved despite GSP Plus status by European Union. They asked the government to take measures for containing decline in exports of the value-added industry.