All Pakistan Textile Mills Association (Aptma) NWFP chapter Chairman Afan Aziz has expressed his dismay over the recent increase in the bank interest rates and its adverse affect on the capital intensive industry.
In a statement issued here on Friday, he said that the State Bank of Pakistan's increase in discount rate by as much as 0.5 percent might not achieve the desired result of controlling the inflation, he emphasised, it would certainly lead to inability to sustain the economic growth that had been achieved over the past 6-7 years.
He pointed out that textile industry was the first and foremost to bring the country out of a long recession. He feared that increased interest rate on working capital from below 6 percent of the recent past to the present double digit were pulling the rug underneath the textile industry.
He warned that such increase in the interest rate would usher in the era where once again to save the banks from crashing and to bring industry to operation another circular like Circular BRDP 29 would be need. In such a situation, he added jobs of the low income group would be affected, leading to rise in unemployment and it would amount to curbing one evil (inflation) while giving rise to a greater evil (unemployment).
Afan Aziz also referred to the step motherly treatment meted out to the textile industry, the spinning industry in particular, which had been given nothing to let it continue its growth and be able to compete internationally.
He pointed out that the cost of production of the industry up and country has tripled in the past one and half year due to the rising cost, especially the repeated increase in the cost of fuel.
He emphasised that industry in the up country was in no position to sustain any further economic crunch, such as the recent increase in the interest rate, which not only had the effect of eroding any profitability, but would also lead to negative growth in the already industrially and economically backward province of the country.
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