The first ever National Textile Policy was recently announced by the government and is being generally hailed by the stakeholders since it not only addresses some of their key concerns and demands but also shows (albeit after a long wait) the required commitment and assumption of ownership by the Textile Ministry for providing meaningful policy direction to this largest national manufacturing sector. While the announced policy tends to be quite comprehensive and well researched its success will largely depend on the team assigned to micro manage its implementation and the operational strategy it then goes on to adopt. More often than not, perfectly good policies in the past failed to yield the desired results owing to blatant micro-management failures. Further, we find that embedded in the policy itself are measures that represent its core strength but ironically remain beyond the executionary ambit of the Textile Ministry. For example, it is all very well to announce 'Priority in Gas and Electricity Load Management, but to be able to effectively carry this out poses some serious practical challenges. First, to implement such a measure requires equal assurance and willingness by the related yet different ministries, namely Water & Power and Oil & Gas. Second, the textile industry itself is scattered and does not draw power from either dedicated textile feeders or textile specific power stations. Therefore ensuring continuity of supplies only to textile mills while switching off others, may operationally not be doable. Third, the textile industrial units (especially the small and medium sized) are so grossly intertwined with residential areas in virtually all industrial centres such as, Faisalabad, Gujranwala, Sialkot, Sheikhupura, Multan, etc., that it gets to be virtually impossible to separate the gas and electricity supply lines of domestic users from the industrial ones. Perhaps a better approach would have been to consult with relevant ministries and announce that a) Textile units in all sizes are entitled to alternative feeder arrangement that ensures continuity of supply from one feeder while the other is switched off for load management, b) Gas to be made available at the doorstep of textile units (like in the earlier days) to overcome the current prohibitive cost of simply getting a gas connection installed; a cost that at present literally denies a significant portion of the industry from cheap, efficient and clean fuel in shape of natural gas, c) Since gas supply management is there to stay, especially in winters, why not just announce a reduced gas tariff (like in Bangladesh) for industry that can in-turn help average out additional fuel costs undertaken by the industry during the period when gas is not available, and d) An establishment of a joint cell consisting of representatives from related ministries and the industry to create a forum that is easily accessible to mill managements and that can at the same time ensure to resolve problems that emerge on an on-going basis. Whereas, TISF (Textile Investment Support Fund) as an overall initiative is surely a step in the right direction as it entails support to human resource development, technology upgradation, marketing facilitation, infrastructure development and creation of management efficiencies, the same cannot be confidently said about the specific way the TUF (Technology Upgradation Fund) that has been structured within the TISF. Outright grants to capital costs (20% of smaller investments) and reclamation mechanisms (interest cost up to 5%) are always complicated, messy and prone to mismanagement and corruption. A simple and transparent way is to follow the German example where there is a separate fund for machinery upgradation at subsidized mark-up (in Germanys case it is nearly zero) and tax laws that allow expensing out costs at accelerated depreciation in as short a period as 24 months. This not only prevents any possibility of misuse through inflating costs or non-related use of upgradation funds, but also provides incentives that generally should come with managing a healthy organization. Similarly, measures announced about the drawback schemes (1% on processed fabric, 2% on home textiles, 3% on garments, 1% extra on 15% sales growth and 1% on levies and unadjusted taxes) and subsidized export refinancing can often tend to be counterproductive if not implemented with prudence or without demanding any type of tangible reciprocity from the beneficiaries. Too many times in the past we have seen refund (sales tax) and export rebate schemes being, i) misused, ii) subjected to mis-declaration of item codes (something that even ends up destroying our national image as it annoys the administrations of importing countries), and iii) instrumental in promoting departmental corruption, which leaves a genuine and honest export house at a serious disadvantage. Even, if the ministry feels that some kind of liquid cash injection is necessary (at least in the short-term) to boost exports and help resurrect the industry, the same should mainly be linked to export turnover growth and to be only en-cashable directly through the bank carrying out the related export transaction. Such a policy will ensure that only performing export houses benefit and will also at the same time take out any element of corruption. Also, regulations need to be put in place that funds drawn against export refinance are strictly used for the same purpose and not siphoned out to be invested in other sectors (which may at some time yield quick speculative profits) as has invariably happened in the past. A good way perhaps to ensure this would be to increase the mandatory ratio between the export sales versus the borrowing, which at the moment calls for only 2.2 times the amount borrowed. By putting up this ratio the government can ensure that, 1) profits are reemployed in the business, 2) the refinance funds are used only for what they are meant, and 3) most importantly the allowed subsidy is achieving its underlying purpose of boosting national exports. There was a time not long ago where Pakistani textile exports accounted for more than 67% of the total national exports and were maintaining an annual growth level of nearly 20%. However, instead what we are witnessing today in this sector is a declining global export market share and thereby also a reduced share in the national exports. This leads us to ask the resulting logical questions that are our textile exports and especially the projected growth sustainable or is it simply correlated to specific support packages? Or in real effect, what the government should really be focusing upon is that the target it has set itself for exports in this policy ($25 billion by 2014) and especially the accompanying growth levels necessary to achieve this target, should both be sustainable going beyond 2014 and not just limited to the next 5 years. For this to be possible we need to take a cue from our immediate next-door neighbours, China and India, which have in recent years taken some truly visionary steps and not just confined themselves to using monetary dole-outs as solutions. For example, if we closely analyse the measures taken by India to put its companies on the map of the world, we find that in its policy endeavours: +++Credit was not merely subsidized but more importantly made abundantly available to companies of all sizes. +++Promoting entrepreneurs and entrepreneurship (this entails encouraging productive risk taking). +++Facilitating by creating a special dedicated fund and a professional expertise cell to help aspiring and efficient Indian companies conduct global M&A (Mergers and Acquisitions). Indian companies have since led the world pack by securing the highest number of global M&A in 2007 & 08, thereby creating irreversible linkages cum sustainable global market shares. +++Bringing about a 'silent corporate revolution. We saw Manmohan Singhs government in 2004-05 being instrumental in bringing about more than 250 corporate related legislative changes (in less than eight months) to improve and liberate investment environment in India and thus paving the way for corporate India to assume a leading position on the world economic scene. All this without a fuss and with no attempt at attention seeking in order to avoid any unnecessary opposition or noise. +++Lastly, for any national policy to be meaningful it is essential that its benefits are widespread, far reaching and that they trickle down to the common man. Conceded that like a chain reaction a healthy industry will lead to higher employment and therefore directly benefit the common working persons, but a visionary policy goes a step beyond the standard by accelerating the trickle down effect and by ensuring that the benefits meant for the lower tier are not diluted in any way by the time they reach them. In my book to make this possible a good approach would have been to link a part of the subsidies to workers support systems as well. Meaning, to encourage all employers to fully register employees, pay minimum wages, discharge full and accurate payments on levies like social security, old age benefits, gratuity, etc. and attain minimum required social accountability standards and then for the government to make such a documented expense tradable against announced relief refunds. Such a system would ensure smooth management-labour relations, minimize social unrest, increase productivity and reduce poverty, because while the employees will go on to get the maximum impact of their entitled benefit schemes, the employers on the other hand will only have to bear a subsidized financial burden and more importantly will be freed from oppressive dealings with an abnormally high number of bureaucratic departments.