Textile Industry Making Headlines but Negatively
State Bank of Pakistan (SBP) Governor has also noticed this trend, who has suggested that the money borrowed by the textile industry might be going to other profitable sectors like real estate or stock exchange. "Borrowings of the textile industry are continuously growing, but textile exports are on the decline. I wonder where this cheap borrowing is going, maybe it is going to the real estate sector?" SBP Governor Ashraf Mahmood Wathra commented during his recent visit to the Karachi Chamber of Commerce and Industry (KCCI).
His concerns are not baseless. According to data, the textile sector borrowed around Rs123 billion in the second quarter (Oct-Dec) of the current fiscal year 2016-2017, which is 36% more compared to Rs90.3 billion in the same period of previous year. However, textile exports in the first nine months (July-March) of FY17 declined 0.9% to $9.278 billion compared to the same period of last year.
The export industry of the country depicts the similar situation, as the exports fell 3% in July-March span to $15.19 billion. The country needs a new breed of exporters because the current lot of exporters has no urge to grow.
On the other hand, the exporters believe that the government as well as the SBP governor are unaware of the ground realities, which slowed down the pace of growth of export sector. "The SBP governor does not know about the full chain of textile sector," Pakistan Apparel Forum Chairman Muhammad Jawed Bilwani said. "We want to talk to him (the governor) about our problems, but he never gave us meeting time."
In the beginning of this year, Prime Minister Nawaz Sharif announced a Rs180 billion package for five major export-oriented sectors, including textile, to give a boost to Pakistan' s export sector. With announcement, the leading textile exporters were hopeful that the package would help increase their exports but the package release and other formalities may take time.
Textile industry officials are still of the view that the sector can provide maximum number of jobs to the unemployed youth because it is highly labour-intensive industry. Textile industry makes more than 60% chunk of total exports of the country, but like some other export sectors, textile exports have been stagnant at level, where they were a decade ago.