Textile policy gets accolades from stakeholders

Ever since the inception of Pakistan, textile industry has been the mainstay of our industrial profile and the biggest export earner. This industry accounts for 40pc of the industrial employment and provides livelihood to more than 10 million farming families. More than 50pc of our exports earning came from this sector in the year 2008-09. Successive governments failed to accord desired attention to this vital sector of the economy and consequently the development and promotion of this industry has been carded out within the overall framework of commerce and trade policies with the result that machinery and technology has not kept pace with world standards, infrastructure remained primitive and inadequate, high degree of fragmentation marred efficiencies available skills were deficient, uneven growth of value-chain undermined balanced development of the sector and external restrictions such as quota and restricted access provided limited opportunities. The cumulative impact of these shortcomings is that at present we are converting one bale of cotton into $1,000 as compared to $4000 by our competitors.
Taking cognisance of the significance of the exports to the economy and the inadequacies afflicting the textile and textile exports, the government has taken two very significant steps. First, to address the issues like falling exports competitiveness, lack of sophistication, diversification of products stemming from weaknesses inherent in the economy, have been addressed through a medium term plan called Strategic Trade Policy Framework 2009-12 (STPF). It provides assurances for continuation of trade policy for three years and the businesses can plan their production and export orders accordingly. The important policy initiatives under STPF are certainly for capital cost, reliability of electricity supply at mutually agreed time by the electricity distribution companies and insurance cover for visiting buyers.
As part of this initiative, Ministry of Commerce has recently provided Rs 27.3 million from Export Development Fund for opening FPCCI offices in China and Brussels for ensuring better export marketing. Similarly the Ministry has provided Rs 9.380 million for installation of video conferencing facility at FPCCI offices at Karachi, Lahore, Islamabad, Quetta and Peshawar.
The second and the most radical policy initiative in regards to tackle the problems of the textile industry and enhancing exports has been the announcement of a separate and a comprehensive Textile Policy. This is for the first time in the history of Pakistan that the textile industry has received the priority it deserved. The policy spanning 2009-14 aims at reviving the textile sector through Textile Investment Support Fund (TISF) of Rs 40 billion. The policy envisages developing international and domestic demand driven capabilities, infrastructure improvement, skill development, standards for international compliance, increasing productivity, improving quality and ensuring optimum utilisation of resources. It aims to achieve an export target of $25b in five years and would increase employment by 100pc. It also focuses on investment of $8b by the private sector towards increased capacities while the govt would invest in the infrastructure, skill development, marketing and information technology.
The policy also stipulates sub-sector initiatives on public-private basis. In this regard the textile policy purports to improve and revitalise ginning, spinning, knitting, processing, fashion designs, handloom and handicrafts, carpets and technical textiles etc.
Textile industry has grown as the single largest manufacturing sector of Pakistan. However support industries like textile machinery manufacturing, textile dyes and chemicals and accessories have not developed proportionately. Most of the demand is met through imports. To reverse the trend, the policy stipulates promotion of joint ventures with leading international brands by providing appropriate incentives for such undertakings. To encourage women participation in the industry, government will pick two regulatory costs on social security and EOBI.
Another salient point of the policy is that the government will be extending concerted efforts to secure due access for Pakistani textiles in some of the key destination of our exports. Preferential access as well as FTAs in such markets will be the focus of such efforts. The government, in fact, has already initiated efforts to achieve these objectives and contacts have been made with the European Union and US leaders urging them to facilitate Pakistan in these areas in view of its role in the war on terror.
The launching of the Textile Policy by the government is one of the many steps it can boast of in other areas of the national activity as well. It is an imaginative and comprehensive package that takes care of all the segments and aspects of the textile industry. It has already received unqualified accolades from all sectors of the textile industry, a rare approval rating for government initiatives.