Exports of leather and leather goods
policy will identify the problems of exporters and their financing
From SHAMIM AHMED
Sep 25 - Oct 01, 2000
Commerce Minister, Abdul Razak Dawood said that
after textile, his ministry was focusing on promotion of export of
leather and leather goods from Pakistan which had a tremendous
potential. The government was preparing a new policy i.e.
"leather vision" similar to "textile vision" with
the same type of incentives to be offered to leather sector.
The Minister claimed that the "textile vision
2005" has been hailed by all concerned and the objective set
therein would certainly be achieved. After textile, leather is an
important export earning sector with a tremendous scope for growth.
Export target for Leather Industry for 2000-2001 is $630 million
against $270 million last year. Through new leather policy government
intended to increase it to at least 1 billion dollars.
Addressing the inauguration of National Institute
of Leather Technology of Pakistan, the Minister praised the export
performance of the leather sector during the first 2 months of the
current financial year which has showed an increase of 25% if compared
to the corresponding 2 months of the last year. The new policy will
provide all incentives and concessions to fully harness the potential
in this sector. He disclosed that a meeting of stake holders in the
leather industry will be held early next month to finalize Leather
vision 2005" before giving a presentation to the Chief Executive
and the Cabinet and finalise the package. After sectoral analysis of
the leather industry the government, in consultation with the
Industry, will finalise the package of incentives and concessions to
Leather Policy will provide a broader framework to
bring about improvement in its chain of processing and remove
irritants at the export stages. The study currently being undertaken
is also assessing the "financial back-up" that is needed to
achieve desired goals in this important sector of economy.
The exports of leather and leather manufactures
have witnessed a drop in the last five years, causing considerable
loss to this industry that employ over 250,000 workers. Its share in
total exports has declined from 8.0 per cent in 1994-95 to 6.9 per
cent in 1998-99. The dip is registered both in exports of finished
leather as well as leather manufactures.
As regard the leather manufactures, its exports had
declined from 389 million in 1993-94 to 269 million in 1999-00.
Leather made-up include shoes, uppers, jackets, gloves etc. However,
the only plus point is the decline in exports of raw and semi-raw
leather (wet blue) which indicates increase in the value addition. Its
share in total exports has declined from 80 per cent to 60 per cent
during the recent years.
The entire ranges that involves pealing of hide
from the animal to its final processing is being studied to identify
problems. It is being seen as to what level of education is needed for
the labour involved in initial stages of hide preservation.
Particular emphasis is being laid to develop a
mechanism to collect and preserve hides of sacrificial animals which
are the best skins available and that too in the large quantity. The
problems of tanneries and the downstream leather industry are also
being looked into. The Policy will also identify problems of leather
exporters vis-a-vis their financing needs and lack of access to the
According to the sources, the major impediment in
increasing leather exports is the price competitiveness our goods are
facing in the international market owing to high cost of production.
Similarly, there has been a very little improvement towards value
addition that resulted in its low demand. At the domestic level, there
is a lack of skilled manpower outside Karachi and Lahore.
Non-availability of ancillary components and spare-parts for the
processing industry has added to the problems.
Talking informally to the newsmen after a meeting
with the members of Chamber of Commerce and Industry, the Commerce
Minister said that economic salvation of the country lies in its
exports. He said that during my meeting with the leading
industrialists of the country we have visualised the 30 billion annual
export target in ten years. It may sound too ambitious in the present
circumstances but I am confident that it is achievable." If we
wish to regain our economic sovereignty and get rid of foreign debts
we will have to achieve this target", he added.
The achievement of 30 billion annual export target
in ten years, as, visualized by the Commerce Minister and leading
industrialists of the country may look like a tall order in the
economic situation prevailing over the past many years. Examining it
in the perspective of the country's track record in fulfilling plan
targets generally, one may tend to dismiss it as yet another instance
of wishful thinking. However, there can be no denying the urgency of
making the best of the country's tremendous export potential to ensure
its survival and release from the burden of accumulating external
debt. It may be worthwhile to point out that although various
strategies earlier adopted for export promotion from time to time were
often appended with inspiring phrases, like 'export or perish' just
for the sake of treating effect, how we are really in the midst of
that kind of an appalling predicament. For, if we fail to increase our
export earnings in a measure commensurate with our debt, defence and
development requirements, we would lose the very chance of survival.
Hopefully now, the private industrial sector that had been
relegated to the background, because of flawed policies and programmes
of the past governments in a row and is now being conscientiously
reactivated, and seems convinced of the prospects of a real export
boom. This should be evident from their reported readiness to meet the
challenge, positively responding to the government's realistic
approach of taking them into confidence and associating them with the
crucial primary phase of decision making in matters of vital economic
importance. The variegated spread of the country's industrial sector,
as built from scratch with the traditional enthusiasm by the
entrepreneurs, should have sufficed to set the pace long before, for
economic progress in the real sense. But the fact is, that despite its
acumen, skills and resources, this pivotal sector of the economy had
remained incapacitated and failed to make its contribution to national
development mainly because of the flawed policies that continued to
negate its enthusiastic moves in that direction. In this context, the
minister's reiteration that departing from the past approach of
utilising the bureaucratic inputs only, it has been considered
imperative to interact with the private sector in the formulation of
industrial policy, should have inspired the participants of the
meeting to make practicable suggestions. Now that the industrial
community has been given the chance of speaking its mind to the
government on how best to help it improve its performance on the
export front, indications are that the needful would be done.