Pakistani textile sector, the mainstay of the
country's 12 billion dollars exports, is ready to compete
international rivals in post-January quota free regime but finding
difficult breaching non-tariff barrier.
Pakistani industrialists' disregard to labour and
environment laws may pose threats to its exports to European Union and
the US as Pakistani consignments would highly be susceptible to
disapproval after 2006 when strict laws under World Trade Organisation
(WTO) would be in place.
" Many a small cotton and textile units, which
account for larger exports, are not compliant of international
environment and labour laws, which could be a setback with the
enforcement of the trade regime, " said a leading exporter Anjum
Salim who is former chairman of All Pakistan Textile Mills Association
(APTMA). He said: "Pakistani textile millers made heavy
investments over past four years to upgrade their machines to meet
world quality standards and became competitive in the international
market but remained deficient in enforcing fair practices in labour
and environmental fields."
"A significant investment of four to five
billion dollars in past four years has lifted the textile profile to
world standards and made it pretty competitive in the international
market but other barriers still impede swift journey," said Salim.
"We could witness good increase in our textile
exports to the EU and the US markets in the first year of free trade
but may face a slow-down afterward," said the former chief of
APTMA, the apex representative body of the millers.
But the prick of free quota regime and Generalized
System of Preference has already started poking into the garment
exports, which are said to be fallen by 20 to 25 percent during
January, February (the first two months under WTO).
About 70 percent of garment factories are reporting
under utilization in the northern part of the country as claimed by
Muhammad Naseer Malik, former chairman of Pakistan Readymade Garments
Manufacturers and Exporters Association (PRGMEA). The initial
estimates show that the utilization has come down to 65 to 70 percent
from 90 percent till December 2004.
No statistical account, however, is available so
far because of some irregularities in data compilation by the Federal
Bureau of Statistics.
The US and EU cumulatively imports over 56 of
Pakistani textile products.
With about 10 million installed spindles and
thousands of dyeing and bleaching textile units across the country,
environmental protection agencies are still trying to gather data
about the industry but facing hurdles.
"We are trying to collect data but so far
there is no comprehensive assessment of how many industries are
complying with the environmental protection practices," said
Irfanullah Tunio, deputy director of Environment Protection Agency of
southern Sindh province.
"To my rough estimate 20 percent textile
units, which are mostly bigger industrial groups, are taking care of
environmental protection measures."
Environmentalists also complain about the
non-availability of the data although skeptical of the statement of
the agency saying a gross violation of environmental laws is going on
in this port city, the largest industrial base of the country.
"There are very few industrial units which may
have been practicing in accordance with the environmental standards
but a large number of industrial units are being run ruthlessly,"
said a researcher at World Conservation Union (IUCN), Tahir Qureshi.
He said a huge quantity of untreated industrial waste that is being
dumped in the Arabian Sea daily, signifies the trend.
"Textile mills, tanneries, and pharmaceutical
factories are dumping their untreated and hazardous waste at the
colossal rate of 175 million gallons per day," said Qureshi. The
waste comprises metals, chromium, lead, and mercury.
Implementation of labour laws yet also remains an
area of concern for the Pakistani textile exports that account for
about 67 percent of the total exports or over 11 percent of the GDP.
"We have the best legislative framework in
South Asian region with regard to labour rights but unfortunately no
effective entity exists to get them implemented making the laborers
life ever miserable," said director of Pakistan Institute of
Labour Education and Research (PILER) Sharafat Ali.
"Pakistani authorities, although not oblivious
of the emerging challenges under WTO regime, still lag behind the
timely steps to mitigate them as administrative hierarchy being the
main caveat bottlenecks are there. The policy is framed at the federal
law whereas provinces are responsible for its implementation that
erupts several anomalies," said central labour advisor to the
Pakistani Ministry of Labour and Overseas Pakistani, Raja Fuzail
Hassan. But, the planners attach hopes to an Asian Development Bank
funded programme, which is expected to ensure labour rights in medium
term. "Currently we are devising a Labour Protection Policy and
this ADB assisted project has two-year term which after completion is
expected to bring in positive change," said Hassan.
However, the short-term gains of the free trade
enthrall exporters of the textile made-ups who are counting on the
free trade virtues.
"We see a jump of 15 to 20 percent in our
garment exports after the tariff barriers are done away with,"
said Dawood Usman Jakhora, chairman Pakistan Readymade Garment
Manufacturers Association (PRGMA). Readymade garments account for over
one billion dollars of total eight billion textile exports.
Nevertheless, visionaries are not complacent.
"We are faced with a make or break situation
in the next couple of years," the former chief of APTMA said.
RELIEF PACKAGE IN OFFING
The government is set to announce an elaborate
relief package for the textiles and apparel industry in a coming days.
The first ever federal minister for textile industry, Mushtaq Ali
Cheema, is reportedly going to announce removal of sales tax on
textile industry. The government is also considering allowing
zero-rated import of raw materials and ensuring smooth flow of working
capital for the textile units in the country. Spinning and polyester
units would be directly benefited from the zero-rated import of raw
materials and the value-added sector would get a relief with the
removal of GST.