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‘Pakistan loses comparative share in global market’

Flaw in textile policy

By Mansoor Ahmad
September 10, 2015
LAHORE: Pakistan has lost comparative share in the global textile market since the start of this century, depicting a fundamental flaw in the national textile policy over the years, experts said on Wednesday.
They have warned that continued indifference by the government towards the textile sector may turn it in to a nonentity globally.
In 2001 Pakistan’s share in global textile and clothing trade was 2.2 percent that has gradually declined to 1.66 percent.
Similarly, in 2005 Bangladesh’s share in global textile and clothing market was less than Pakistan at four percent only. It is now 2.5 times higher.
While, India had a share of 3.2 percent in the global textile market at the start of this century. It increased to 5.20 percent in 2005 and currently stands at 7.5 percent. Thus, India’s share in the global textile and clothing trade was only one percent higher than Pakistan in 2001 and is now six percent higher.
‘We wonder what went wrong that inhibited the growth of the textile sector,” Gohar Ejaz, group leader, All Pakistan Textile Mills Association (Aptma), said.
He said globally all the economies provide some support to their textile and clothing sector.
The developed economies impose high import duties on textiles to protect their domestic manufacturers. In fact, the import duties on textile products in developed economies are three times higher than their average tariff.
He said even in developing economies the import of finished textiles is subjected to very high duties to encourage use of domestic textiles. Moreover, the textile producing countries particularly in South Asia have formulated incentives and facilitations to neutralize the comparative advantage that Pakistani textiles enjoyed in the region.
In 2005 when the textile quotas were removed the London School of Economics and numerous institutions in the United States declared that Pakistan is much better placed then all others in capturing higher textile and clothing share after removal of quotas.
This revelation made Pakistani planners complacent, while it provided food of thought to the planners in competing economies. The textile sector in Pakistan, for more than a decade, made hectic efforts to operate without government crutches. “We continued growing but at a very slow pace compared with our competitors,” he said, adding that Pakistan’s overall share in global textiles continued to decline.
During the last five years, the textile facilitating policies of country’s competitors enabled them to push Pakistan out of many markets. He said hue and cry of the textile sector was ignored by the government planners making at least 30 percent of the industry sick.
Aptma Chairman S M Tanveer said, “If we look at the industrialization in India alone it would be revealed that they have moved to a much higher level while we stagnated.” He said in 2005 India was producing 19 million cotton bales of 480 lbs each while Pakistan was producing 9.8 million bales.
In 2015 Indian cotton production tripled to 29 million bales, while Pakistan’s production inched only to 10.23 million bales. He said, “The result is that India is a net exporter of even raw cotton while we have to import around 1.5 million bales annually.”
He said textile and clothing exports in Pakistan were $11 billion in 2005 that have increased to $13.3 billion in 2015. India on the other hand more than doubled its exports from $17 billion in 2005 to $41.4 billion in 2015.
“During 2011 to 2015, investment in textile machinery was almost zero in Pakistan while Indians invested $63 billion in new textile technology,” he said.
Stagnant textile exports mean zero job creation in textile since 2005 in the country.