Not withstanding APTMA's decision to defer it's protest plans until further developments, the announcement of industrialists and exporters in Faisalabad to begin an indefinite strike from Friday bodes ill for the Pakistani economy and particularly the textile industry.
After talks between the Ministry of Commerce and the Joint Action Committee of Industrialists and Textile Exporters resulted in a deadlock, many of the key export industries of Pakistan have begun a strike until the government announces a major relief package for the industries. With the recent budget, the textile industry saw its gas and captive power tariffs rise by 31 and 68 percent respectively, a move they say has cost the industry its competitive edge on the world market.
With the government's failure to announce any relief measures for the industry - at least until the return of Prime Minister Gilani from Dubai - the industries and their employees will spend at least five days without any income from products.
This will undoubtedly play havoc with an already fragile economy, as the chairman of the Pakistan Hosiery Manufacturers Association (PHMA) North Zone, Muhammed Javed Aslam pointed out in a recent meeting that the textile industry earns sixty percent of the country's foreign exchange.
With the country's trade deficit crossing US $20 billion in the last fiscal year, the current shutdown of the textile industry - or even its possible slowdown - would cost the country dearly. On a more human level, the loss of employment for the hundreds of thousands employed by the industry - reported by Aslam as 38 percent of the Pakistani workforce - would be brutal.
Combining the wages lost by in the shutdown, as well as the increased trade imbalance this strike will cause clearly illustrate the need for this issue to be settled as soon as possible and the need for the machines of the nation's industries to start turning once again. A new policy - one that deals with a growing import bill by cutting it not by making exports more costly, is needed.
Economic analysts have told the Business Recorder that the government is planning on curbing non-vital imports into the country, citing the import of mobile phones and vehicles add two billion dollars to the nation's trade bill annually. Indeed limiting the imports of these non-essential items could prove a smart step in helping the Pakistani manufacturing sector diversify as well.
With a bulk of the country's exports currently coming from four products - textiles, leather goods, rice and sports goods - an enormous opportunity exists to build up the other sectors of the economy, especially more high technology products where quality matters as much as price.
Restricting the import of higher technology, non-essential imports could provide a strong impetus not only for satisfying our domestic market with new domestic products, but also through increased technology and investment build up these goods to become export quality.
As two experts on the Pakistani economy - Michael Kugelman and Robert M. Hathaway - say, "Pakistan must look beyond textiles. Electrical consumer goods, pharmaceuticals and the service sector can all bring considerable prosperity." The writer is an intern at Business Recorder newsroom and is currently studying Political Science and History at Tufts University in the United States.
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