Playing the blame game

“Everything the government cannot do and too many demands from the government are also unjustified”, said the Federal commerce secretary Muhammad Younus Dagha on Wednesday. On the other hand, the chairman of the Pakistan Apparel Forum put the onus of falling exports on the government, blaming the soaring cost of manufacturing.

Playing the blame game is old hat for manufacturers, exporters and ministry officials alike, but it does nothing to address the stark reality of the dire straits Pakistan’s balance of trade is in. As per the latest figures, Pakistan’s balance of trade worsened by 22 percent in July from June this year. More alarming is the year-on-year decline; the balance of trade in July increased by 55 percent when compared to July 2016.

Part of the problem is the rising consumerism in Pakistan. Imports of most products group saw a high double digit or triple digit increase in July 2017 when compared to imports of July 2016, from cars and motor cycles to textiles, dry fruits and edible oil.

However, in terms of the highest addition to the import bill, the age old culprit of petroleum products paled in comparison to machinery imports. Petroleum product imports rose by 22 percent ($170 million) since last year whereas machinery imports crossed the $1 billion a month mark by increasing by 41 percent ($295 million), when comparing July FY17 to July FY16. CPEC drives the increase in machinery imports but once the plants are operational, petroleum and gas products are expected to increase.

While exports witnessed a year-on-year increase of 11 percent in July this year when compared to July of last year, they continued to decline on a month by month basis. Overall exports fell by $281 million from June to July. The bulk of the decline was due to textile exports that fell by nearly 20 percent.

The government lays part of the blame at the textile sector failing to attract fresh investment and lack of research on innovation. However, even he acknowledged that most of the textile sector’s concerns were genuine. Industrial gas and electricity tariffs, wages, water rates in Karachi, and lack of liquidity are some of the reasons behind the high manufacturing costs that are making Pakistan’s textile exports less competitive internationally.

Amidst the uproar of rising trade deficit and the pointing of fingers, someone has to take responsibility. Policy makers, manufacturers, exporters all want to attain similar goals. To do so require the effort of working together, listening and resolving issues, and addressing complaints, rather than continuing to play the blame game.