I am not a writer, but since I have been reading a lot of reports, which are written by experienced reporters telling that the exporters are holding back shipments to get concessions from the Government, which is quite ludicrous, I am forced to write this paper to tell the reality about Pakistan textiles and its future.
At the very outset I would like to say that the future of Pakistan textiles is very bleak for the simple reason that the policies of the government are not export friendly.
Everybody is talking of this 25 billion rupee package that has been given to the textile industry. I would like to address this question to the Governor State Bank of Pakistan, Ministry of Finance, CBR and Ministry of Commerce, asking them to tell us how much of this 25 billion package has been disbursed to the value-added sector up to now, while this policy was announced 2/3 months ago.
Millions are stuck in the R&D and there is no visible relief. Every time we approach the banks they say they don't have the manpower at the State Bank. These are the things, which are not so serious but they hurt the cashflow.
The other problem of Pakistan is its image. Pakistan has a very bad image - problem, no buyer wants to come to Pakistan. We have to be 20% cheaper than our competitors to be able to sell in the market, even though our product is better than theirs. Yet we have to do so only because nobody wants to come and buy from us, the reason being security. No stores want to send their buyers to Pakistan as insurance does not cover them.
As it is everybody is romancing India at the moment because they can go to see Taj Mahal, enjoy Goa beaches, see the Jaipur Palace etc.
These are the realities that are not being seen by our bosses in Islamabad.
What has happened over a period of time is that a lot of changes have taken place. Some companies have gone bankrupt, while some have been bought/merged to become stronger.
The result is that there are more sellers than buyers. If buyers like Wal-Mart, J.C. Penny and Target decide not to buy from Pakistan, then it has a very serious problem.
Islamabad thinks that we are a cotton country and buyers will come if we have a good product and price. I agree good product and price are necessary, but we need customers to come, hold our hand and walk us through quality improvements and teach us what is good for them because each buyer's needs are different.
The success of China is that the Americans go and live there because they enjoy the Chinese culture as there are no hassles or security issues while we have everything, which is a hassle and a problem.
The other problem is too much interference of government agencies, specially of EOBI and social security. They hassle the hell out of manufacturers.
In our opinion the Government should pay them and should ask the manufacturers to pay to an account on a self-assessment system so that we should have nothing to do with these people.
Now we come to the Social Compliance issue. Social Compliance factory inspectors are either Bangladeshis, Indians or Chinese, all three do not want our factories to pass Social Compliance because of the simple reason that they are nationalists and their factories will suffer in case Pakistan factories get approved. Therefore, only when they have found nothing wrong, they give us a color code, an "orange" which will come and re-audit you. I think it has to be addressed seriously.
A Textile Ministry was formed for helping the textile people. I don't think it is capable of resolving our issues sitting in Islamabad. They have to be in Karachi as it's a Commercial Hub.
I don't think that Export Promotion Bureau really or future TDAP can help us either.
It's a matter of textile's survival for the economy of Pakistan. Imagine 60% of our economy depends on cotton. How very sad, as it's a natural produce and, God forbid, if there is a calamity like flood, storm or attack of insects then the economy will be badly affected.
Nobody has done anything about developing polyester. Look at China polyester industry. It has billions of tons of capacity. If we cannot start and invest in polyester plants, at least allow polyester to come in freely so that the industry can survive. Spun yarn is the raw material for the spinning industry, but it should be allowed to come in freely. But to help a multinational company with guarantees should be the problem of Government of Pakistan. Why should the textile industry suffer?
The input costs have gone up for electricity and gas and we are paying huge amounts in dollars. Why?
It's also a farce that Pakistani labour is cheap. Pakistan labour is probably one of the most expensive now in South East Asia, except for Korea and Japan.
Compared to Sri Lanka, India, Bangladesh and China we are the most expensive. If the Pakistani weaver makes less than Rs 400 a day, he is not even interested to work for you.
The Government of Pakistan has to take an immediate action. We are not asking for crutches, we are just asking for us to be competitive.
Huge investments have taken place. The banks say they don't have LTF - EOP funds so they lend us money in the short-term financing, but the reality is that we use it for purchase of equipment and if any manufacturer can substantiate that this money that was borrowed under short term and was used for purchase of equipment then I think that these should also be allowed under the LTF-EOP Scheme.
Putting up of garment and textile cities is un-necessary. Please do not waste money on such cities. We don't need them. We already have enough factories and capacities. What we need are buyers.
We request the Government of Pakistan, specially the Prime Minister, to write letters to the Presidents or CEOs of stores like Wal-Mart, J.C.Penny, Target etc and invite them as State Guests, one by one, to come to Pakistan. And we should hold exhibitions and they should visit our mills because it is very important. If they start to buy everybody will buy from us.
I can continue to write volumes, but the reality is that Pakistan Textile Industry is in serious trouble and if nothing is done to resolve it, then we are history.