Widening trade gap of $3.5 billion plus is shedding negative impact on local currency value escalating production cost and adversely affecting exports, and calls for co-ordinated and concentrated efforts by the new team of economic managers in the Cabinet.
This was observed here by Ahmad Kamal, Chairman of Pakistan Textile Exporters Association (PTEA), in a communication to Prime Minister Shaukat Aziz on Monday.
Congratulating Prime Minister Shaukat Aziz for his judicious selection of ministers for Commerce Humayun Akhtar, for Industries and Production Jahangir Khan Tarin, for Textile Industry Mushtaq Ali Cheema, and keeping portfolio of Finance with himself, he said that a strong and experienced team has been set up to handle the economic, commercial and industrial policies of the new government.
He expressed hope that this well-knit combination would co-ordinate and implement the best possible and viable policies.
Pinpointing the major issues confronting the national economy, Kamal said that external pressures were engendering inflationary trends on credit sector and the new investors are hesitant to further invest in new projects.
Similarly, he said, the export sector is also confronted with fierce competition from its traditional rivals. He said that recently Indian government has given loaded incentives to its export sector by way of free credit on quantum jump achieved by exporters.
"Our rivals will be enjoying comparative advantage of 20 percent against their Pakistani counterpart. Yet another handicap which Pakistani exporters will be suffering from is the high cost of production.
The cost of raw material in the country has escalated due to indirect effect of rise in petroleum products prices abroad.
Sea freight rates have also gone up by 30 percent, making Pakistan's consignments transportation costs prohibitive, ultimately adversely affecting the exports of the country," he observed.
The PTEA chairman said that with the induction of new minister for textile industry the textile exporters feel assured that these aspects of export sector would be well taken care of.
He was hopeful that the new minister is fully capable of handling these problems, being himself a leading exporter and having practical experience in the field.
He said that the country is at a new crossroad of its economic history in the face of textile quota regime phase-out and dawning of new global free trade scenario, and requires immediate bold decision-making process to tackle the newly arising problems.
He expressed hope that the team of economic managers and incumbent ministers would successfully take the country forward into the new global trade order.