Bangladesh has emerged as third in the world in terms of garment industry and ironically it is not a cotton producing country. On another note, Pakistan is one of the best cotton producing countries in the world, but its textile exports have been declining for the last couple of years despite having GSP plus status from the European Union. According to the chairman of the All Pakistan Textile Mills Association, at least 110 textile mills have been closed down due to high cost of doing business in the country. The high cost of electricity, gas and disproportional tax rates have adversely affected the industry leading to the closure of textile units in several parts of the country. The ministry of textile, the ministry of trade and commerce and the ministry of finance are there with thousands of government officials drawing hefty salaries and perks at the cost of business community, but they are unable to find a way out. The export of cotton yarn has dropped by 45 percent and cotton fabric by 22 percent in November this year as compared to the corresponding period last year, showing an overall decline of 15 percent in terms of their value.
According to the chairman, the garments exports constitute $4 billion as against $8 billion of the textile industry. The garment sector could not fully exploit the GSP plus status it enjoys in the European market due to difficulties facing the textile sector at home. The spinning and weaving sectors, which are the center of the textile value chain, are losing the viability due to the rising cost of production. The situation in Punjab is even worse as textile units are at the verge of closure due to unavailability of gas in severe winter season. There is a need to salvage this sector, which is the backbone of the country’s economy,by introducing tariff and non-tariff measures as well as a support package.
It is an era of competition and Pakistani business community must diversify their products to capture the world market and compete with regional countries which export similar products. Though the cost of production is high in Pakistan as compared to other countries in the region, but the entrepreneurs have to find a way out. The business communities in other countries, which are carrying the burden of colonial past, one way or the other, have been facing the similar situation as in Pakistan. However, the government cannot be absolved from its responsibilities and it must look into the matter.
