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Government has set a target of achieving fifth number in the textiles in the global market, elevating its position from seventh by 2005.

June 24 - 30, 2002

Commerce Minister Mr. Abdul Razzak Dawood told a gathering of economic writers that the government was fully conscious of the problems to be faced by our Industrial Sector under the quota free regime as envisioned by the World Trade Organisation (WTO) aspiring for a free global trade by 2005. "Our textile leather and rice Industries are fully geared to face this onslaught and now the government was focusing its attention on engineering and chemical sector", he added.

Responding to a question he admitted that the sugar and cement industries were not equipped to meet this challenge. He preferred to keep quiet when asked as to how the surplus production of these two industries is proposed to be disposed of under the no-subsidy policy being persued by the present government.

Speaking at a forum arranged by the APP, the Commerce Minister said that the budget 2002-03 is a stabilising budget, which will make the industry internationally competitive in the long-term without any cosmetic and artificial subsidy, financing and support of the Government. The government had not given any shocks to the industry as it had continued the previous policies except to increase the support price of cotton from Rs 780 to Rs. 800, he added.

Ammanullah Khan, Former President of Rawalpindi Chamber of Commerce and Industry (RCCI) and Islamabad Stock Exchange (ISE), Sohail Altaf, Chairman FPCCI, Islamabad Chapter and Hameed Akhtar, President of Society for International Development (SID) also participated in the discussion.

"It is an open, market-driven, transparent and consistent policy which is the most important incentive to the industrial sector in the budget", the Minister said adding that the government will pamper the industry upto a certain extent" providing level playing field, without any SRO regime which will ensure the quality of the industrial goods.

Explaining the main objectives of the budget regarding industrial sector, the Commerce Minister said that the direction of the budget is to eliminate the artificial subsidies for domestic industry. Besides, one of the other aims of the budget is to curb unnecessary protection to the industry so that it could prepare itself to meet the challenges of the international competition. The government has tried to give maximum benefit to the local industry and avoided to give any shock in the budget which might harm the production of the industrial activities. The new budget will provide stability to the industry so that they could face the challenge of the international competition after the year 2004, when all the quota restrictions are to be ended under the World Trade Organisation (WTO) regime.

The Commerce Minister said the government is committed to eliminate the culture of providing artificial subsidies to safeguard employment opportunities, revenue generation and increase in the volume of exports. To achieve this objective, the government has tried to create a level playing field for the domestic industry while dropping the import tariff of raw materials for particular industries. "The rate of stainless steel was brought down to the level of 5% from 30% which would benefit the exporters of the surgical instruments and cutlery products," he added. The commerce Minister said due to consistence policies of the government, the television sets production has gone up from 28,000 sets in year of 1999-2000 to 450,000 sets in the fiscal year 2001-2. The total revenue generation has also gone up from Rs.490 million to Rs.720 million from this industry during the last two years, he added. For the coming fiscal year (2002-2003) the government hoped that the production target of 600,000 TV sets and revenue generation of Rs.1 billion would be achieved.

To boost the TV manufacturing industry, the Commerce Minister said he had talked to Governor State Bank (SBP) to ask the banks to provide leasing facility to the consumers for the purchase of TV sets. The Governor SBP has assured that the issue would be taken up with the banks in the positive manner". He said the government is also considering to ask SBP for leasing facilities to 4 more products including air conditions, refrigerators, washing machines and motor cycles. However, he made it clear that leasing facility only to be available for the local made products.

Dawood said the government would continue its policy not to impose ban on the import and export of any product in the country even it faces shortage of the particular thing in the country. "We are going to become recognised trading nation in the world and for this we will continue to the open the country for export and import goods, he added. He said during the previous governments when there was shortage of particular thing in the domestic market, the ban on export of the particular thing was imposed and the exporters of that particular thing suffers but this government has taken a principle stand not to impose ban on any thing even it face shortage in the country. "At the same time, the imports of particular thing will be continue," he added.

Giving an optimistic picture of the industrial sector and bright performance of the textile sector, Commerce Minister said that the government has set a target of achieving fifth number in the textiles in the global market, elevating its position from seventh by 2005. The investment in BMR is Rs.330 billion, which would push the national exports to the desired level. The achievements of textile sector were positively moving in right direction with transparent, market driven mechanism and least government intervention.

The textile industry has gained 57 per cent in value-added products, as compared to 52 per cent last year and 37 per cent in 1995.

The imports and exports of raw cotton are free from any government intervention and now the market is gradually maturing in its operations. Pakistan is one of the best in making bedware (25 per cent) and in towel the progress this. year is also pretty good.

The message given to bedware producers is that it should maintain its market share in the world without losing a penny in the competition. He said that in the coming trade policy the producers would be encouraged to attain the distribution in world markets so as to improve their market niche.

He also quoted US administration, which has not lifted quota for 666 category in textile because they were aware that Pakistan would capture the whole market. He said that he warned the US authorities that the level of protection they are offering to their industry would ruin it.

The Commerce Minister placed engineering and chemical industry as the next two areas of focus of the Government as part of efforts to prepare industry for the WTO challenges. He, however, expressed disappointment over the Sugar and Cement industries which, he added, have not come up to the mark. Lack of confidence between the farmers and mill owners and excess-capacity production has impeded the growth of this sector.

The Minister while responding to a question expressed dissatisfaction over the export of vegetable and fruits which, he said, was far below the potential. "This year we export fruits and vegetables worth $ 180 million despite having surplus in kinos, potatoes, onions, chilies etc. The Minister explained that inconsistency in policy of exports of vegetable and fruits had build an image of the country as a "non reliable suppliers. In the past, whenever there was a shortage of any fruit or vegetable, their exports were banned out of fear of their scarcity in the domestic market."