Bangladesh has grabbed the garments market and now its garments export has swelled to 22 billion dollars per annum and its manufacturers/exporters have managed to attain maximum orders in Heimtextil international trade fair. Pakistan has lost its garments export market due to the high cost of production and delay in supply of goods, however Pakistan maintained its monopoly in bedwears and its share still stood at 53 percent and 47 percent rest of the world.
According to Syed Muhammad Aasim Shah, Chairman of All Pakistan Bed sheet and Upholstery Manufacturers Association (APBUMA) while briefing about the Heimtextile trade fair that around 2721 exhibitors from 64 countries attended the fair.
He said that government had fixed the target of bedwear export at 1900 million dollars but we exported the bedwear of 1904 million US dollars during July-December 2008 while our ready-made garment exports stood at 1452 million dollars against the target of 1575 million dollars in last six months.
Knitwear (Hosiery), however, met the target and its export rose to 1872 million dollars against the target of 1850 million dollars. The APBUMA dreaded the continuation of interest rates imposed on textile industry by State Bank of Pakistan (SBP) is set to devastate textile industry.
He underscored the major grievances of textile industry are the heavy interest rates charged by banks, load-shedding of electricity and suspension of gas supply which he maintained were enough to finish textile industry. Government has been advised to lowering interest rates being charged on industries in order to address the ongoing crisis, the rising ratio of unemployment among industry workers could be overcome by providing them with loans on easy conditions. He expressed serious concern over the monetary policy issued by the State Bank governor.
He indicated that economists have agreed on the implementation of an expansionary monetary policy in the state of recession to control the damaging effects of the recession on employment and investment. "The logic behind the continuity of contradictory monetary policy is not understandable," he said. The SBP has been justifying the tight monetary policy to control inflation for the last two years but inflation has been rising continuously. "It shows that the SBP is preparing the monetary policy without studying the nature of inflation," he said.
"In Pakistan, the inflation can be controlled through a tight monetary policy. It is a supply side phenomenon. The major cause of rising inflation in the country was the increase in prices of industrial inputs and shortage of essential items of daily necessity. "All these are inelastic products and monetary policy cannot control their prices. We have to take measures to improve the supply side of these goods and improve our inventory management.
Syed Aasim Shah said that in the name of reducing inflation, the State Bank measures have been generating more inflation and, therefore, as a consequence of these steps, inflation will not decrease but it will increase further.
The discount rate was 9.5 per cent at the end of July 2007 and the rate of inflation was 7.8 per cent. "Now core inflation has reached 18 per cent from 30 per cent in mid-2008 because of world recession and decline in oil prices," he pointed out.