Pakistan Hosiery Manufacturers Association (PHMA) has criticised the government for its vague policy on the continuation of research and development (R&D) support programme, saying that the uncertain economic policies are pushing the apparel sector towards a complete closure.
The entire apparel sector has suffered huge losses of Rs 6 billion since June 30 this year because of the abolishment of R&D programme, said Javed Bilwani, zonal chairman and Naqi Bari, former central chairman of PHMA at a press conference on Thursday at PHMA house.
They said that the government should honour its pledges on the continuation of six percent R&D to the apparel sector till June 30, 2009, as it has already promised, adding that industrialists are unable to continue business amid no financial relief from the government. Referring to the news reports that government has decided to end the R&D programme despite its previous commitments, they said that it issued a press release on July 29 this year, stating that "government will continue to provide Research and Development (R&D) support up to June 30, 2009 for the apparel sector."
If the government is not clear on its decisions that it should categorically ask the business community to decide its fate, they said, adding that there is huge opportunity for local investors in Bangladesh as its government has already assured them a full support, they maintained.
They said that if the local investors are facing difficulties in running existing business, the possibility of robust foreign investment is very small to take place. The apparel sector, which has $3.8 billion annual exports to its credit, is being treated unfairly.
China has increased rebate on export by one percent from November this year, while interest rate in US is one percent and in England three percent, whereas in Pakistan it is mounting to 15 percent, making the local businessmen defaulter to banks and markets, they said
They said that foreign buyers are already very skeptic over the country's overall economic situation, while after the delay or cancellation of export orders will further deviate them from Pakistan towards any other regional country.
Expressing fears, they said that huge jobs cut might occur, out of which a significant number will be women labour, if units started closing on a permanent basis. As a result, huge unemployment is feared to take place, which can also further worsen the law and order situation besides increasing the poverty level. "There is nothing clear that what is going to be with electricity and gas tariffs even next moment then how can a manufacturer continue business amid such an uncertain conditions", they added.
They said that many exporters, keeping in view the government's past commitment on resumption of R&D programme, have placed export orders but the recent scenario suggests that they are likely to either lose buyers or fall in financial crisis. About the previous R&D claims submitted by the exporters, the government has also not paid them on exports made till June 30, 2008, demanding that previous claims should be cleared immediately.
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