It has been three and a half months since the financial year 2014-2015 started, and yet the government has still not approved the new five year textile policy that is supposed to increase exports and focus on making finished products in order to improve the state of the country’s balance of payments. Considering that textile commodities already contribute 53 percent of the country’s exports, the fastest way to improve the economy is by boosting textile exports, especially since Pakistan has been awarded GSP Plus status by the European Union. The old policy promised much but delivered little, and the PML-N has been promising a change in the fortunes of the textile industry by facilitating them in whatever way they can. However, this year’s 5 percent decrease in exports tell us that productivity has decreased even further.
As it stands, the textile industry has two major problems that need to be addressed if they are to increase exports to the EU and elsewhere. First, the energy crisis has hit the production sector the hardest, and the All Pakistan Textile Mills Association’s (APTMA) plea to the government to reduce the amount of gas loadshedding has fallen on deaf ears. With winter, even more cuts are to be expected. Goods can only be produced with a fuel source, and the government’s claims of focusing on export-driven growth are negated by its attitude towards the largest exporting industry of the country.
Secondly, the textile industry is also facing a liquidity crisis, which means that its capacity to purchase raw materials has decreased. The FBR owes roughly Rs. 12 billion to the industry, but APTMA has not managed to get the government to pay. In the previous five year plan, Rs. 188 billion was earmarked to boost textile exports, out of which the industry received only Rs. 29 billion. Unless a new policy is formulated and finalized to address these two issues before even getting to the host of other hurdles that stand in the way of boosting exports, the textile industry’s exports will continue to drop, and we will all be witness to the slow demise of yet another industry.