Holiday bonanza

On the fourth day of Eid, the banks were still closed, as were all public offices. They were to reopen yesterday (Wednesday), after five days of Eid holidays starting last Friday.
It will take another couple of days for the government officials to get back into shape for serious work. The private sector too is in holiday mode as those who left to celebrate Eid at home would return only gradually.
Of course, there are exceptions like television, newspapers, army, police and other essential services which allow either none or few holidays for Eidul Fitr. But in general the country is shut and disconnected from international business for an unreasonable duration of time. This exercise will be repeated on Eidul Azha.
You might think that Pakistan has quickly evolved from a state of underdevelopment with a lazy lifestyle to a leisure-oriented society, without passing the intermediate stages of development. In fact, granting five holidays on Eid is just another way of gaining popularity without taking into consideration its cumulative effects.
Government employees are routinely allowed two weekly holidays. Add these to around fifteen other public holidays and the system is shut for 120 days a year, meaning that the public sector in the country works only two out of every three days. Or, to put it brutally, on average, every third day is a holiday!
This holiday bonanza in the public service is not without repercussions on productive sectors such as trade and industry which are also crippled by energy shortages and unbearable production costs. The textile industry, the locomotive of industrial jobs and export, is badly hit. As a result, despite the increase registered in exports to the European Union by virtue of the GSP Plus facility granted by Brussels, our global exports declined by nearly five percent in FY2014-15 to close at $23.885 compared with $25.110 billion in the preceding year.
Imports in the same period rose by two percent – from $45.073 to $45.980 billion – notwithstanding a substantial decrease in oil prices. This has led to an eleven percent rise in the trade deficit, moving from $19.963 to $22.095 billion. Besides the ongoing woes of the textile industry, the rupee is overvalued by five to seven percent, making all Pakistani exports less competitive.
To address this crisis, the federal government, which goes on holiday for days at end, has constituted a committee to identify ways and means to pull up the textile sector from a state of recession. Do not hold your breath for any spectacular results. In this age of specialisation, the government should not expect much from the system that has landed our industry in this mess in the first place.
The authorities should use the millions collected in the export development fund to hire industry and trade policy specialists with international repute to find radical solutions. The fear is that if the textile sector is not rehabilitated, it would not only lead to greater unemployment but we shall have to rely more and more on home remittances for essential imports. The rising foreign exchange reserves, now over $18 billion, would be depleted, raising fears about Pakistan’s credit rating and capacity to service its international debt.
The state of the economy in general is not reassuring as the GDP growth rate remains at around four percent. Foreign Direct Investment has fallen drastically while a business friendly government is in power. The Karachi Stock Exchange can continue to attract hot money but it does not guarantee jobs in agriculture or industry.
The malfunctioning of the export sector, particularly that of textiles, is so deep-rooted that only a total rethink on the part of the government and the textile industry owners will bring desired results. An equally committed approach is required to pull up the non-textile sectors if we are not to remain so narrowly based in exports.
It is well known that the garment exports of Bangladesh have surpassed Pakistan’s total exports. But it is less known that the wage level in Bangladesh is half of the average in Pakistan. When their garment industry suffered from recurrent strikes, Bangladesh reverted to one holiday after enjoying two weekly holidays for fifteen years. Further, not only Bangladesh but the two largest textile exporters – China and India – provide various subsidies to their export sectors. All three fare better in providing adequate power supply to their industries which is unheard of in Pakistan.
Will the high and mighty in their centrally cooled offices get off their high horses and go around the country to get a feel of the struggling productive sectors? The alternative is Pakistan being gradually phased out of industrial exports. The writing is on the wall. This is not the time to hold more committee meetings with interminable rounds of tea and samosas but rather to open our eyes and look where our competitors are heading.
Email: saeed.saeedk@gmail.com