Pakistan's textile industry will greatly benefit from the promising opportunities under WTO quota-free regime as it has the highest percentage of textiles and clothing exports among all developing countries, senior members and experts of All Pakistan Textile Mills Association (Aptma) told Business Recorder here on Wednesday.
In a detailed interview, these sources spoke about the WTO scenario of Pakistan's economy; global relocation of textile industry, based on free trade and competitive advantages from January 1, 2005; anticipated effects of quota elimination on Pakistan; strengths / weaknesses of textile sector in Pakistan; and role of the government in strengthening the competitive ability of the private sector.
Talking about the strengths of textile industry in Pakistan, these sources said that the industry has the availability of raw materials, substantial investments under BMR/Greenfield projects; comparatively better technology; availability of skilled workforce; industry relatively less sheltered (ie tariff protection and subsidies); and better cotton yield per hectare than India.
They said that textile industry is now more responsible and mature and more transparent in doing business. The industrialists are quite confident to make further investments in value-added sector and the industry structure is now more balanced.
They said that the positive macroeconomic indicators are also favourable to boost the textile exports because of continuity of policies, falling interest rates, stable exchange rate policy, and comparatively strong foreign exchange reserves.
They also listed the weaknesses of the textile industry, such as demand/supply gap of cotton/ MMF, cotton contamination, lack of skill development institutes, cost of doing business, lack of research and development support and narrow market base.
The industrialists said that WTO posed an enormous challenge for the players in the Pakistan economy. From an environment of protectionism, subsidies and quotas, the world is set to move to a free trade environment. However, they said, the government has to play a very crucial role in improving the competitive ability of the private sector--first as a guide, and second as a monitor--to see that a conducive environment of high efficiency and productivity is establishment to outsell their competitors. They said that the government and all its departments have to play the role of a facilitators if Pakistan is to meet the challenges of the free trade and requirements of the WTO, effective from next year.
They called for good governance to develop social, economic environment, improved law and order and democratic stability in the country, increasing expenditure for research, development, infrastructure and capacity building and greater involvement of the state to boost the private sector.