KARACHI, Nov 24: The trade and industry has raised a strong demand for devaluation of the rupee amid deepening crisis on export front where all major export items are showing persistent decline. They say that the slump in export trade owing to the high input cost is rendering them uncompetitive in the world market.

Amid growing concern for all-around-decline in key export goods of the country, the industry feels that no option is left except to devalue the rupee to arrest the rapidly falling exports.

Up-till-now most of such demands of getting relief from the government-- in one way or the other--had been mostly coming from the textile industry but recent export figures showing fall in exports of major items have sent shock waves across the industry.

The high cost of finance and utilities are the major causes for making industrial production costlier and products uncompetitive in the world market, the industry mostly complains.

However, the government blames high petroleum prices in the world market for triggering inflation and also pushing up utilities cost thereby resulting in high cost of doing business.

Similarly, there is also strong argument from the government side that the mark-up rates had been raised to keep the inflation under control with a target of 6.5 per cent for the current fiscal.

However, industry says that the government is not living up to its commitments and even when the POL prices declined in the world market there is no corresponding cut in domestic rates. Similarly, OGRA (Oil and Gas Regulatory Authority) on Sept 1, 2006, had suggested reducing gas prices by 12 per cent but the government is delaying the issuance of notification for its implementation.

There are many ways to assist the industry and save the dwindling exports as the country was already confronted with yawning trade imbalance and the current account deficit. However, only meetings are held at different official level and suggestions are submitted by different trade segments to the government, it added.

Fawad Ijaz Khan, the founder chairman Pakistan Leather Garments Manufacturers and Exporters Association (Plgmea) told Dawn that in August last year the government committed to give Research and Development (R&D) support to leather garments exports but so far nothing has been done.

As a result of this, he said, leather garment exports during first quarter of the current fiscal declined by 45 per cent and of other leather goods, including leather declined by 35 per cent.

Mr Fawad said the industry had been demanding of the government to work on short and long-term plans to arrest falling exports by providing the needed support to the industry.

He further said that the IOCO (Input Output Coefficient Organisation) in August this year had unilaterally decided to reduce duty drawback rates from 5.17 per cent to 3.22 per cent. “Despite our repeated representation we were only given promises and good wishes but so far not tangible work had been done in this regard,” he added.Either the government, he said, should ensure a level-playing field with other regional countries by brining down cost of doing business or should not withdraw support at this juncture when the world market is highly in favour of buyers.

---About two days back country’s largest sports goods manufacturers--Gaga Sports--which had been the major supplier of footballs to Naike, was closed down and around 7,000 workers became jobless. This company used to have its own cricket and other playgrounds for its workers inside its colony.

Former chairman All Pakistan Textile Mills Association (Aptma) Anwar Ahmed Tata said that the industry as a whole was under tremendous crisis and immediately needed the government support. “If we do not manage to arrest falling exports the country would confront with severe economic crisis as trade gap will further widen and may swallow our foreign exchange reserves,” he feared.

He said that if the government was not willing to bring down mark-up rates and even did not want to reduce utility rates the only option was left to devalue the rupee and save the industry and exports as well as jobs of millions of workers.

Mr Tata complained that while other textile units were getting LTF (Long Term Financing) facility at refinance rate of 7 per cent the spinning, which is the basic industry of the textile sector, was being deprived of it. He said in India for the last five years the government was providing TUF (Technology Up-gradation Fund) for long-term financing by paying back 5 per cent of the mark-up charges.

He apprehended that if the economic planners did not rise to the occasion this will have a snowball effect on the entire economy of the country as many industries will close down on bank defaults, which will ultimately further aggravate the unemployment situation in the country.