January 12, 2002	Saturday	Shawwal 27, 1422

KARACHI, Jan 11: Import of textile machinery during December has dropped to about 28 million dollars from more than 40 million dollars import in November indicating that halt in revamping and modernisation of textile industry is about to come in next few weeks.

“No fresh import orders for textile machinery are being placed,” a leading spinner said who pointed out that the December import figures of textile machinery reflected the orders placed sometimes in July and August.

A fall in dollar exchange value and simultaneous depreciation in European currencies against rupee in Pakistan should have encouraged the textile manufacturers to place more orders for machinery and equipment. But uncertainty has set in after September 11 incident, which aggravated after October 7 when the US launched retaliatory attack on Afghans.

An uneasy stand-off with India in December has introduced a new element of uncertainty and fear in the business environment and leaders of textile industry are quietly watching the developments with cross fingers.

With some orders still in the pipeline, textile dealers expect some more delivery of textile machinery and equipment in next one or two months. “In last six months textile machinery import was worth 228.61 million dollars,” a spinner said who pointed out that it showed an impressive growth of more than 39 per cent in demand of textile machinery.

These imports of textile machinery and equipment are the part of the massive investment programme taken up by the big business groups for last 18 months to re-design and revamp industry. Focus is on value-added sector and technology improvement in spinning and weaving and development of back up plants of bleaching and dyeing.

But as the indications are that the demand for textile machinery and equipment has started falling and is likely to taper off in the coming months as exports have also started showing a declining trend.

Textile exports have virtually stagnated in last six months stunting all export earnings. Textile exports fetched 2.85 billion dollars in last six months showing less than one per cent growth over 2.83 billion dollars in same period last fiscal year.

Overall exports have also suffered a severe setback and have shown a small negative growth. Market watchers say that if uncertainty continues to grip the business environment, the exports will drop further in the future.

Pakistan’s economic losses on account of Afghan crisis has been estimated at between Rs140 billion to Rs265 billion in the gross domestic production (GDP) causing an unemployment of 60,000 to 120,000 in the current fiscal.

A team of three economic researchers of the well known Social Policy and Development Centre (SPDC) drew up three scenarios assuming 10 per cent, 15 per cent and 20 per cent export decline. The 10 per cent decline in exports translates into loss of 1.1 billion dollars, 15 per cent loss quantifies to 1.4 billion dollars loss and 20pc would cause 2.2 billion dollars loss.

The federal commerce minister Abdul Razak Dawood has already conceded a loss of 1.1 billion dollars in exports in the final counts against projected 10.1 billion dollars by June next. Federal finance minister has been talking of two to three billion dollars loss to the national economy which includes losses in exports, revenue, increase in current account and expansion in budget deficit.

A striking observation of the SPDC survey is that GDP loss is greater than employment. “It is indicative of the fact that a section of labour is moving from relatively higher wage export industry to relatively lower wage occupations that is hawking, peddling and other informal sector jobs; leading, perhaps, to greater insecurity and impoverishment.”