KARACHI, Nov 20: The value-added apparel sector suffered losses to the tune of Rs5.5 to 6 billion during first four months (July-Oct) of the current fiscal year due to non-payment of the research and development (R&D) support by the government.

The textile apparel exports are around $3.8 billion per annum on which the government gives 6 per cent R&D support. However, since July, 2008 there has been no payment on this account despite repeated assurances from the highest level at the government.

This was stated by Jawed Bilwani, chairman Pakistan Hosiery Manufacturers Association (PHMA) in a joint press conference with Pakistan Apparel Forum chairman Naqi Bari on Thursday at the PHMA House.

Taking strong exception to the reports that the ministry of finance has turned down the summary moved by the minister of textile industry recommending payment of R&D worth Rs12 billion to the garment and apparel sector, these leaders demanded immediate approval of the R&D support to save the industry and millions of jobs.

They pointed out that Syed Naveed Qamar, the previous finance minister, had assured in several meetings as well as in official announcements that it has been agreed in principle that the government will continue to provide R&D support up to June 30, 2009 to the apparel sector.

As a consequence to this the exporters made firm commitments to their foreign buyers keeping in mind continued R&D support as was assured by Naveed Qamar.

They highlighted the woes of the apparel sector, which is faced with multiple problems of unstable exchange rate, heavy load-shedding, rising discount rates, high utility charges, liquidity crunch, and poor law and order situation.

These leaders said that the global financial crisis has further added to their miseries and they are unable to keep their market share when there is no support from the government.

Mr Bilwani said when commitments officially announced were not fulfilled it result in loss of confidence between the government and the private sector, which is harmful for industrial growth in the country.

He urged the PM’s Advisor on Finance Shaukat Tarin to allow R&D on apparel exports up to June 30, 2009 as per the earlier commitments because exporters have already entered into contracts with their buyers taking 6 per cent R&D into account.

Giving some break-up of R&D support Naqi Bari said that annual apparel exports come to around $3.8 billion and R/D at 6 per cent would amount to $230 million annually or $20 million per month. Consequently, during last four months (July-Oct) apparel exporters have lost around Rs5.50 to 6 billion ($80 million).

However, he said that the industry would not be able to survive on its capital for long and the day is not far when the entire apparel sector will shut down rendering millions of workers jobless.