LAHORE: Everyone knows that our economy is in dire state and no one is in a position to jumpstart it. But the government and the businesses can certainly stop further deterioration by being fair with each other.
The textile sector for instance always points out the drawbacks they face against global competitors but hide many advantages they enjoy. Our weak currency is a huge advantage against all competitors.
It is true that we have to import around 25 percent inputs, but we enjoy an advantage in 75 percent inputs. Our labour wages for instance are among the lowest in textile economies. Our water charges are also lower. We have almost a matching power tariff for the exporting sector compared with Bangladesh and our gas charges are much lower after Bangladesh increased its gas rates by 176 percent two days back.
We have been pampering the textile sector since 1960, still we are in low quality textiles and garments. India, Bangladesh, Vietnam and now Cambodia as well export high value apparel. They charge 4-5 times higher for high valued products.
They are in industrial textiles, medical textiles, special purpose textiles like fire retardants etc; we have almost no capacity for non-woven textiles and other value-added textiles. No wonder textile sectors remain sick.
The fault lies with the government as well because it subsidises the sector, instead of committing resources for skill development, institutions of learning, technology acquisition, developing centres for machinery development and manufacture, acquiring brand names etc.
The money spent will be far less than the money being doled out now with far greater impact on the economy. Industrialisation, in most of the countries, in the last 80 years, started from textiles. Then these economies matured and went into different sectors of engineering. Japan and Malaysia, went into auto and electronics. Korea went into ship building, auto and electronics, India went into defense, auto, IT, gems and jewellery and consumer goods, China went into auto, consumer goods and some electronics, Taiwan went into auto parts, moulds and dies, and computers. Bangladesh and Vietnam are moving towards high tech industries.
The underlying strength developed by all of these countries was capital goods and machinery manufacturing. All these are knowledge based economies now and their driver is the engineering sector. Their capability is design and manufacturing cost effective machinery, using appropriate technologies.
Look at the textile tycoons of Pakistan that have grown in various other sectors like cement, sugar, banking, power, aviation, shopping malls, real estate and dairy. None established an engineering concern of repute.
They import machinery for all their ventures including cows in the dairy sector from Europe, Australia and the United States instead of developing local breeds. They want concessions on import of energy efficient spindles, while India is producing them locally and exporting to all Asian economies.
The governments on the other hand continue to get hoodwinked into giving concessions based on fake statistics provided by businesses. The APTMA chairman only a day before again frightened the government by claiming that 7 million textile workers have been rendered jobless due to the current economic crisis.
The factual and fully documented fact is that there are a total 4.7 million textile workers in Pakistan with 250,000 in the spinning sector. The textile millers’ representatives even defy the well-documented figures of imports of textile machinery.
They claim that in the past four years, textile machinery worth $5 billion has been imported, on the strength of which they can add $5 billion additional exports if their demands are entertained. The Pakistan Bureau of Statistics reveals that textile machinery worth only $2.41 billion was imported in the last four and half years.