Former President Multan Chamber of Commerce and Industry (MCCI) Khawaja Muhammad Jalal-uddin Roomi has demanded at least two years moratorium for payment of debts besides decrease in bank mark-up in view of the inherent capacity of the textile industry to bring about meaningful improvement to the economy.
Talking to newsmen here on Friday he said the main factor that offset the laudable gains secured by the industry in such adverse circumstances, was inflated raise in interest rate. Since 2004 interest rates shot up dramatically. Kibor has surged 261 per cent. Likewise, the bank spread rose from an understandable 2 per cent to an unreasonable 7.75 per cent.
This magnitude of bank spread is among the highest in the world and it is evident that such a high bank spread could be realised only with skewed effect to other sectors. Roomi was of the view that keeping into consideration the inherent capacity of the textile industry to bring about meaningful improvement to the economy, the government must act to prevent compromise on this capacity and provide breathing space to the industry to overcome liquidity problems, relax prudential regulations, restructure outstanding bank loans, reduce interest rates for raw material procurement and incentives mergers and acquisitions to enable realisation of economies of scale.
Currently, 90 percent of the operating textile industry is incurring cash losses and facing closure as more than two months' production has been lost due to non-availability of electricity and gas, he added. He said the repercussions of a setback to the manufacturing sector particularly the textile have been varied and diverse.
Roomi said that the competitiveness of the textile industry has been a subject of research and analyses for which different studies have been conducted that include The Way Forward that was done under the critical supervision of the Tariq Saigol Committee, a study entitled The Girzi Report and The APTMA Study on Textile Industry Competitiveness. The textile industry has since July 2007 kept the government updated on its competitiveness, Roomi claimed.
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