The acting Chairman of Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea), Bilal Mulla on Monday expressed grave concern over the decreasing trend in Pakistan's garment exports. He stated that garments export in the first five months of FY12 fell 9 percent and if the same trend continues, it may hit an overall decline of about 17-20 percent.
Mulla listed several internal reasons for the decline, besides persistent bad law and order situation followed by lingering energy shortages, which have virtually crippled the industry. Moreover, the negative perception about Pakistan and high financial costs are adding fuel to fire.
He said because of deteriorating law and order situation and shortage of electricity and gas, factories are unable to deliver orders in time and whatever limited orders they managed to secure from foreign buyers, are also in peril because of these problems.
"If we are fortunate enough to have no strikes, we are crippled by electricity load-shedding or gas shortage, which reduce our work week to only 3-4 days," Bilal said, adding that due to gas shortage mills cannot process fabric in time and the sewing units are simply unable to guarantee in time deliveries of export shipments. With this productivity level, we cannot compete with Bangladesh let alone India or China, he added.
He also complained about the negative image of Pakistan created by electronic media. Even the smallest news are sensationalised without having proper check which has created a negative image of our country in the minds of our buyers.
Besides the above, high financial costs are making it impossible for exporters to approach banks for working capital needs. "We simply cannot target big orders because these would require extensive working capital, hence no other option but to take small orders since the borrowing cost is simply too high.
Although Pakistan's economy is not financed through bank borrowings, therefore there is no concrete basis for State Bank of Pakistan to keep the interest rates high. It deters corporate sector from approaching banks for their financing needs," Bilal said.-PR