KARACHI, May 23: State Bank Governor Dr Ishrat Hussain on Thursday advised Pakistan’s textile industry to enter into joint ventures and partnership with their counterparts in the US.

The American textile industry is in deep trouble because it can no more stand the tough competition given by the imported cheap products, he said.

“The US industry have market, technology, fashion as well as designs but you have cotton and advantage of low cost and if you link yourself with them, they could guide you about market and its requirements,” the SBP governor stressed.

At a meeting with members of the Pakistan Hosiery Manufacturers Association (PHMA) here at PHMA House, the central bank chief said the commerce minister and Pakistan’s commercial counsellor in Washington held similar views.

He urged the hosiery manufacturers in particular to enter into joint ventures and partnerships with US companies and form marketing alliance before the year 2004, when textile quotas are due to be phased out.

However, the governor said there was a common complaint from the US companies that Pakistani entrepreneurs were usually found reluctant in sharing the information. This attitude, he said, was not encouraging the setting up of joint ventures or partnerships.

He said in order to run joint venture entities, it was necessary that both the sides had confidence in each other. And to build confidence, it was important that information was shared and facts disclosed. It would ultimately prove beneficial for both the parties, he said.

The governor observed that individually we are the best in achieving goals and surmounting any heights but when it comes to achieving collective goals and targets, we prove ourselves to be very weak.

Citing an example, he said only recently the Philippines was having exports of up to $5 to $6 billion but now they have gone up to $40 billion in a short period of 10 years. Even the track record of other Asian Tigers, like Japan, Korea, Singapore and China, was based on collective efforts and not on individual achievements.

As Pakistani, we should not compete with each other, but unfortunately it had been witnessed that each exporter tried to undermine the efforts of his compatriot by offering lesser price in the same market or even to the same buyer, he lamented.

Referring to a point raised by the chairman PHMA Shahzad Azam Khan, Dr Ishrat Hussain said that in order to resolve the refund problem it would be better if the exporters adopted a ‘no-duty, no-drawback’ system which only needed simple entries of input and output.

He agreed with the PHMA chief that it was not the job of an exporter to run from pillar to post or from sales tax collector to customs collector for claiming ST refund or duty drawback.

However, PHMA chairman Shahzad Azam Khan informed the governor that DRTE rules framed by the CBR were not workable. As a result, he said no exporter was ready to shift to ‘no-duty, no-drawback’ system.

The governor suggested that trade associations should play positive role in making any system workable by maintaining its credibility. Most of the issues could be resolved on the recommendations of the respective trade body.

Dr Ishrat further said that the business community should weed out black sheep from amongst them as they become the main hurdle in the smooth running of any system.

There is going to be a change in the income tax system from the next fiscal year, which will ensure that taxpayers and tax collectors did not come in direct contact, he added.

Dr Ishrat Hussain said Universal Self-Assessment Scheme (USAS) would be introduced under which only 10 to 15 per cent of returns would be selected through computer for detailed audit and verification. He said in case of any mis-declaration heavy penalty would be imposed.