KARACHI: Ministry of Commerce and financial managers at the helm of government affairs remain reluctant to address the issues raised in frequent applications by Pakistan export-oriented industrial sectors, senior representatives of textile and tanners sector lamented.
“Our exports are on a continuous decline while regional countries’ exports are growing. No step has so far been taken to address our issues to help local industries to compete with regional countries”, a business leader said.
The World Bank has downgraded Pakistan’s standing for ‘ease of doing business’ by recently demoting it to 147 from 144th position. “This is because domestic and foreign investors remained reluctant to invest in Pakistan”, representatives of Pakistan Apparel Forum (PAF), Pakistan Yarn Merchant Association (PYMA), Pakistan Cotton Ginners Association (PCGA), Pakistan Tanners Association (PTA), and marble sector opined.
The government should take immediate steps and measures to reduce the higher cost of production and costly industrial inputs; rationalise utilities tariffs bringing them on par or less than the utilities tariffs in regional countries; and make arrangements for swift refunds to mitigate liquidity crunch, the business leaders said.
Due to high cost of doing business and liquidity crunch export-oriented industry was facing multiple challenges. For viability of export-oriented industry, the business leaders demanded the government to fix cost of all inputs for export 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 market. Moreover, the government should sanction a separate status and accord high priority to supply gas to export-oriented textile manufacturing to uplift exports, they said.
Business leaders Agha Saiddain, Ghulam Rabbani, Jawed Bilwani, Ibrahim Qureshi, Sanaullah Khan and Rana Abdul Sattar said the 12.24 percent negative growth of textile exports in seven months of 2017, as compared to the last year was alarming.
They voiced that government should take responsibility to find the factors behind decline in exports and address the root causes. Textile and leather exports have faced a downward slope amid excessive delays in refunds of billions to exporters; unbridled high cost of utilities & production; and unviable business environment, they said.
Knitwear sector of textile group was facing a negative growth of 1.74 percent to around $990 million, as compared to $1.10 billion in ten months of 2016, they said.
They articulated that to achieve export targets set by government, it was crucial to provide enabling and favourable business environment and curtail the cost of electricity, gas, minimum wages and water rates.
They urged the government to execute practical steps and measures to revise the tariffs of electricity, gas, water, determination of minimum wages on par with the regional competing countries. To achieve a major breakthrough in exports increase, it is crucial that the value-added export sectors including five zero-rated exports sectors be facilitated and introduced with separate rationalised energy tariffs, they said.
Pakistan Bureau of Statistics stated textile exports faced a downfall by 12.37 percent in August 2017 as compared to exports in same month last year. During the current government, exports in year 2012-13 were $24.5 billion and textile exports were $12.8 billion. 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.
If the government failed to pay attention to the issue, the exports would further decline, the business leaders said.
Published in Daily Times, November 3rd 2017.