Pakistan Textile Exporters Association (PTEA) has expressed deep concerns over drop of 7.89 percent in exports in July 2014 despite the availability of GSP Plus benefit. Unprecedented energy shortage was the prime reason behind the substantial drop in exports.
Sheikh Ilyas Mahmood Chairman and Adil Tahir Vice Chairman of the Association said that export numbers in coming months might be even worse as the textile industry in Punjab has been deprived of its basic fuels; and textile exports witnessed 2.37 percent decline in July over same month of outgoing fiscal. Energy shortage is the prime cause of decline in exports as 50% of production capacity of textile industry is dysfunctional due to short supply of electricity and gas.
Drop in exports would have serious consequences for the economy but Government is not addressing the reasons behind the drop in exports, they deplored. Policymakers are not serious in resolving gas supply issue of the textile industry. Instead the available gas is being supplied to the unproductive sectors, causing a loss in terms of foreign exchange, they argued. Situation is becoming unbearable for industry as constant inefficiency is plaguing the viability of production units.
Even, the GSP plus facility has not bring in any desired results and efforts have also gone wasted as we are unable to produce export surplus due to massive energy constraints, they said. Acute energy shortage has chucked the Punjab industry in a bottomless crisis and due to these jobs of thousands of workers is in danger as closure of industry has been started.
PTEA Chairman Sheikh Ilyas Mahmood was of the view that Non-availability of energy, high interest rate and stuck up liquidity on drawbacks and refunds have played a vital role in the lower growth and exports of Pakistan textile industry. Drop in exports and the health of textile sector is being taken up by PTEA at various forums but Government does not understand the gravity of the situation and no steps are taken to ratify the situation. Now is the time that the repair has to be made otherwise decline in exports would put irreparable loss to economy.
He criticised the policies, which had failed to encouraged investment in the textile sector during last five years whereas competitors made huge investments due to the positive and business friendly environment provided by their governments. Rivals, taking advantage of the situation, are creeping into our traditional markets throwing Pakistani textiles out.
Less increase in exports than non-GSP plus India is not a good omen for Pakistan, as India's extraordinary surge in exports reveals the preparedness of the Indians to deal with the GSP Plus advantage of Pakistan. It also shows the non-professional approach of the state machinery dealing with textiles, he added. PTEA urged the Government to take stock of the situation and step up to save the largest export earning industry of the country by restoring viability of textile industry through provision of uninterrupted energy supply at competitive rates and immediate release of unsettled sales tax refunds.