MAY NEW TEXTILE POLICY RESCUE SAGGING INDUSTRY

A POLICY IS ON THE ANVIL

SHAMIM A. RIZVI
June 15 - 21, 2009

Prime Minister, Syed Yousaf Raza Gilani, has constituted a Cabinet Committee to evaluate the draft textile policy envisaging specific initiatives for achieving an export target of $25bn and creating about 3 million jobs during the next five years. The long awaited textile policy prepared by the Ministry of Textile was presented to the PM last week. The Evaluation Committee will report to the Prime Minister within 2 weeks and new policy may become a part of the budget 2009-10.

The new policy will lay foundation for a prospective plan spread over the next 15 years under which the country will move at the higher end of world textile map by achieving a target of textile exports between $75 billion to $100 billion. While chairing a meeting convened for the presentation of the new textile policy, the prime minister said new measures would greatly help in reinvigorating the textile sector, which is the backbone of the national economy. The meeting also approved proposal regarding special initiatives aimed at enlarging women's role in the textile sector.

Secretary Textile Industry Dr. Waqar Masood gave a presentation to the prime minister on the salient features of the new policy. Minister for Textile Industry Rana Mohammad Farooq, Finance Adviser Shaukat Tarin, Food Minister Nazar Mohammad Gondal, Privatization Minister Syed Naveed Qamar, and Investment Minister Waqar Ahmad attended the briefing. The new policy is framed in the wake of dwindling exports from the sector. The export of textile and clothing sector declined by 9.27 percent to $7.898 billion during July-April of 2008-09 from $8.706 billion in the corresponding period last. The proposed policy would focus on research and development to increase supply and increase efficiency of downstream sector in line with the domestic and international market requirements.

An official statement issued after the meeting said that the premier had said that the government would provide all possible incentives for modernizing the textile industry and making it more efficient. He emphasized to focus on areas through which optimum yield of cotton could be procured. He underscored the need for improvement in the quality and quantity of cotton in order to strengthen the competitiveness of the textile industry and facilitate the export of textile products.

The premier called for integrated textile value chain, which could help towards adding value to country's agriculture potential by serving domestic needs as well as high value export demand through a well-planned industrial structure, product diversification, and institutional framework. The secretary textile said that the new textile policy was aimed at bolstering the sector in a big way by facilitating it to develop international and domestic-driven capabilities, development of state-of-the-art infrastructure facilities, comprehensive skill development framework to increase supply of efficient human resource, and compliance with international standards.

The premier was informed that the ministry of textile formulated the textile policy after threadbare consultation with the private sector and other stakeholders.

A new policy to protect the textile industry of Pakistan was long over due. The Textile Industry, the leading export oriented industry of the country, seems to be on the verge of collapse. How serious is the situation can be judged from a statement of the Federal Textile Minister that around 340 textile mills have already been closed down during the last two years owing to various reasons ranging from high mark up, energy crises, and incentives got by the regional competitors in Bangladesh, India, and China. "I am taking the woes to Prime Minister with a request of an urgent and meaningful bailout package. If things did not work I would prefer to quit the Ministry," stated the textile minister Rana Farooq Khan in a press conference.

The Chairman Pakistan Textile Exporters Association, Muhammad Yousaf, while addressing a press conference after participation in Heim Textile Exhibition in Frankfurt, Germany, lamented that textile export orders worth $5billion were lost at the fair because of our uncompetitive prices. This has put in danger 60,000 jobs in Faisalabad alone. He observed that ever-increasing prices of raw materials and inputs and overhead expenses in the country were rendering our textile exports uncompetitive in the international market. Resultantly, the foreign buyers at Heim textile Fair considered our textile items very costly. "Buyers visited our stalls at the exhibition, but refused to place orders in view of the exorbitant export prices," said Yousaf. The buyers were also reluctant to place orders, as they feared that drastic electricity and gas shortage would hamper production and Pakistani exporters would not be able to honor their export commitments on time, he said.

Let us hope that the new policy would come to rescue the sinking major industry of Pakistan by providing all the necessary help and required incentives to it.