Sialkot is ‘the city of entrepreneurs and opportunities’.
Its small to medium enterprises fetch almost a tenth of the country’s total export revenue, by selling sports goods and clothing, surgical instruments, leather and leather products, martial arts uniforms, footwear, etc, to 40 international brands and 60 regional and national brands in Europe and elsewhere.
The city employs roughly 400,000 people in its export-oriented units and supports around 100,000 vendor jobs elsewhere in the country.
While the country’s exports have declined by about a fifth in recent years, Sialkot has successfully maintained its share in the world market through, what its exporters claim, is product diversification and value addition.
“We have successfully protected our exports and jobs in spite of energy shortages, rising power prices, business-unfriendly government policies, etc, at a time when the country’s exports are sliding fast,” Majid Raza Bhutta, president of the Sialkot Chamber of Commerce and Industry, contended during a conversation with Dawn at his office last week.
“Give us an even playing field and we will show you how to diversify and increase exports of value-added products”
“Our exporters do not demand cash subsidies like the large textile tycoons. We just want export-friendly policies and their implementation in letter and spirit. Give us an even playing field and we will show you how to diversify and increase exports of value-added products.”
Bhutta blamed ‘bad government policies and lack of focus’ for the country’s declining exports. “In the early 2000s our leather and leather products exports were half a billion dollars compared with India’s $300m.
“Today Pakistan’s leather and leather products exports continue to stagnate at $700m while India has pushed its global market share to $7bn because its government helped its exporters comply with environment standards (by establishing tannery zones and investing in (water) treatment plants), improve quality and increase value-addition.
“Small and medium units cannot take care of these issues because of lack of funds. It is in such areas that our government needs to focus and invest to help exporters of value-added goods. It is unfortunate that the government has money for metro trains but not for the country’s industrialisation for job creation and boosting exports.”
In order to boost the country’s exports, the SCCI has proposed, inter alia, to the government to identify ‘high priority’ and ‘potential’ sectors and develop sectoral policies for each sector, provide interest-free loans to the SMEs for updating their technology, encourage product diversification, find new markets, and invest in ‘shared’ showrooms and display centres in priority and potential markets.
It has further suggested that necessary steps be taken to bring e-commerce payment gateways to Pakistan, as well as immediately pay the exporters’ refund claims and provide them the facility of back-to-back L/Cs to help overcome fund shortages and procure raw materials for executing export orders.
Last but not the least, the chamber has called for truly zero-rating the entire supply chain of the five major exporting sectors — textiles, leather, surgical instruments and sports goods for boosting their exports.
Sialkot has successfully maintained its share in the world market through, what its exporters claim, is product diversification and value addition
Former SCCI vice president Farooq Myer was of the view that the government policies were very anti-export because exporters are never consulted prior to their formulation or their opinion and views are ignored by bureaucrats.
“How can the government subsidise sugar factory owners with funds drawn from the Export Development Fund (EDF)? These funds should be spent on provision of new technology to the export-oriented sectors not the rich sugar barons,” he said.
One of the largest martial arts uniforms exporters, Ijaz Khokhar, was of the view that the government needs to reform its policies to improve ease of doing business and reduce the cost of doing business, especially for small and medium exporters of value-added goods.
“Because of the government’s lack of cooperation, we have to spend almost 3pc of our revenues on R&D (research and development) and international travel to secure orders for our companies.
“Don’t give us subsidies. Give us an enabling business environment by reducing our cost of doing business through actual zero-rating of our entire supply chain, facilitation of duty-free imports of our raw materials for export, elimination of the scores of taxes we are forced to pay, etc.
“Give our small and medium entrepreneurs a business-friendly environment to thrive and you will see how fast our exports will rise.”
Published in Dawn, The Business and Finance Weekly, May 1st, 2017