Textile industry: Govt must address causes of falling exports, says Bilwani

Says cost of utilities in Pakistan much higher than regional countries

KARACHI: Pakistan’s textile exports are taking a hit because of the high cost of utilities, said Pakistan Apparel Forum Chairman Muhammad Jawed Bilwani.

“The government has not given due attention to the rising cost of utilities during the last two and a half years and this has now become a big hurdle in the way of increasing exports,” he said, adding unless the government evaluated the difference in the cost of manufacturing with regional textile exporting countries, it would not be able to understand fully the causes of declining exports.

He said if the major causes were not addressed, the situation would not improve. “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.”

“If the problems are not addressed properly, exports would continue to fall and would resultantly create a serious issue of employment,” he added.

He remarked that despite having a business-friendly government, the country’s business community was facing such critical economic problems.

The textile industry constitutes more than 50% of the country’s exports. The value-added textile sector has been providing millions of jobs to skilled and unskilled workers. However, instead of supporting export strategies of the value-added textile sector, the government now depends on raw material exporters.

“The cost of electricity in Pakistan is 86% higher than Sri Lanka and 45% higher than India and Bangladesh, while the gas price is 173% higher than Bangladesh and 44.2% higher than India,” claimed Bilwani.

More surprisingly, Pakistan’s gas prices for industries are 90% higher than the United States, which is one of the biggest buyers of Pakistani textile. Approximately, 50% of Pakistan’s textile exports go to the US.

During the first five months (July-November) of fiscal year 2015-16, textile exports declined 8.4% to $5.2 billion from $5.7 billion in the same period of last year.

It seems, he said, that the government was solely interested in increasing the export of raw material. “The export of raw material is encouraged while the export of value added goods that fetch higher foreign exchange with value addition are discouraged.”

Published in The Express Tribune, December 25^th, 2015.

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