Pakistan’s Textile: Progress or Decline?
The habit of extravagance on personal level is often done at the cost of the wages of their employees or the betterment of their mills
One can find a copious amount of issues haunting our national economy. Few of them tend to float on the surface and few, sunk deep inside the sea of oblivion. Deficit, debt and unemployment to name a few. But these are the effects, the outcomes of negligence and indifference, of misplaced priorities and policies. Textile industry of Pakistan is one of those industries in Pakistan that has borne the brunt of the said negligence. Despite its blatant importance, the news about the sector is rarely optimistic and promising.
The share of textile sector in the GDP Gross Domestic Product stands at an unavoidable 9.5 %. It is home to more than 15million jobs, almost 30 % of our country’s workforce. Few other accolades include being the 4th largest cotton producer with the 3rd largest spinning capacity in Asia. Also, the 8th largest exporter of textile products in Asia.Despite being hosted in the top-tier positions in various capacities Pakistan’s share in global textile trade has dropped to 1.8 % from 2.2 %, whereas Bangladesh’s textile sector set an export record last year. Countries like China and India which have, through continuous improvement and innovation, made uncanny leaps in the field of Textile. At the start of century the share of India in the global textile was 3.2 % and now it stands at 7.5 %, thus showing a huge improvement and progress. Pakistan is a place which has all the paraphernalia to be vying with the other top producers in the world but it is in the hierarchy of priorities of our government where the stones, hindering our way to the top lies.
While I can go for pages as far as the statistics are concerned the purpose of this article will, then, not be served. The internet is sprinkled with myriad facts and figures vis-à-vis the condition of our textile sector. But what it is bereft of is the accounts of people, workers, mostly labour who face extreme hardships as the textile sector’s performance wanes. I know of a man who was working in a textile company as a bank duty officer. One day he went to his mill to find out that it has been closed and he had no job now. All this was done, without any prior notice or intimation, on that very day. It, then took him, almost half a year to find a job that too as temporary as the prior one. There are people who have spent 50 years in a company and they are still, if recruited as Bank duty officer or an accountant, the same today. How about a boy who is a graduate in Business Commerce (B.com) working for more than 10 years in a company at a wage of Rupies 15000/-. These and many more accounts, they tend to provide a pristine picture, free from the adultery of words done by the government employees who tend to portray each and every part of our economy progressing at an optimum level.
Technological Up-gradation is a pressing issue. Most of the units/plants have machinery that is obsolete or have become inefficient to use. There are no proper systems in most of the units which increases the chances of glitches and errors. The lack of better management skills and ignoring the global changes in the field of technology and marketing exacerbates the issues. Most of the industrial units are small sized (20-30 K spindles) making it uphill to reach economies of scale. The brandishing of luxury cars by some of the owners strikes a deplorable contrast with the conditions of the mills with improper infrastructure. The habit of extravagance on personal level is often done at the cost of the wages of their employees or the betterment of their mills. But this is not true for the whole sector.
The recent Textile package announced by the government has been welcomed by the textile sector. But analysts are of the view that this will not help the waning exports. Experts believe that Pakistan’s textile industry has the potential to double its exports from USD 13 billion to USD 26 billion provided the cost of doing business is reduced. Pakistan’s textile export stand above USD 13 billion dollars whereas that of India $41.4 billion. The IMF says that Pakistani currency is over-valued at least by 20 % and simple economics tells us that such an appreciation of currency is detrimental for the export sector. Recently Bloomberg also covered the hapless condition of our textile sector. While the world has seen a flurry of job cuts, especially in oil sector due to low oil prices that amounted to 300000 people, no one noticed that Pakistan has shed some 500000 jobs in textiles alone. An eye-opener, an alarming situation.
The global perception of our country, as being a crisis-ridden economy with a rickety growth pattern also contributes to the aforesaid issues. I remember reading Mattias Martinsson’s comments, a man who own more than USD 150 million in Pakistan’s stocks, that ““If you can get the same price in Vietnam or India or Bangladesh, I think it’s still the case that most purchasers will still choose the other countries because their purchasing managers dare to go there. “They can go freely around and don’t have to be afraid” which isn’t their perception of Pakistan, he said.
Tahir Shakoor, who has appeared in interviews for CNBC and other platforms, cherishing more than 25 years of experience in textile sector, shared his thoughts with me. “Pakistan’s textile has a lot of potential. And I believe that our textile sector is in a period of transition, transforming into a more value-added service provider. The principle of survival of the fittest is always at work. Those that are not fit are vanishing. Only Technologically updated and ‘vertically integrated’ units will be viable. Moreover we need to operate our textiles in industrial “hubs” to minimize cost of production. One can also say that the process of ‘rightsizing’ is rendering the industry efficient. I was in Germany few days back for the Heimtextil (the biggest textile exhibition in the world) and was amazed to observe that how effectively we Pakistanis have manifested our potential and abilities there.” Regarding the announcement of recent textile package and CPEC he opted a very practical approach: “CPEC presents a potential threat to our domestic industry. WE can face a fierce competition, it can choke our rail and road communication systems” What can we do about it? “The trade and tariff control should be properly regulated. Instead of layman(s), Industry experts should be in charge of the regulatory affairs.” The textile package needs to be effectively implemented in order for real development in the sector. “The issues of gas, water and electricity shortage is also getting better but it is still a major hindrance in our progress”, he concluded.
The writer is a student of International Relations with interest in International Political Economy. He can be reached at email@example.com