When the average import tariff in Pakistan comes down to 25 per cent from 1st July it will mark a water shed in Pakistan’s economic history. That would mean the tariff has dropped by ten percent in two years and weighs down from the peak of about 120 per cent tariff in the 1980’s.

Pakistan’s economy will touch another landmark in the beginning of 2005 when the long-lasting international multi fibre agreement will expire and the quota system for export of Pakistani textiles comes to an end and the textile trade is exposed to total global competition.

This dual exposure of Pakistani products to global competition means Pakistan has not only to improve the quality of its products, maintain competitive prices and improve its business practices to sustain the present level of exports and achieve a higher quantum. But also enable our products to face international competition at home following the large inflow of cheaper goods with better quality.

The textile industry is supposed to need five to seven billion dollars of additional investment to modernize and expand its production facilities and face the world competition with better products at lower prices. Already a billion dollars are reported to be invested in the textile sector recently, which enabled Pakistan to do well in the textile sector despite increasing global competition and far more investment is needed in the next few years to prepare the industry for the big challenges ahead.

The improvement in the textile industry is beginning with a campaign for a cleaner or contamination free cotton, which will eliminate one of the drawbacks of the textile industry. Pakistani cotton is already said to be fetching two cents more per pound in the international market following the cleaner cotton campaign initiated by commerce minister Razzak Dawood with singular determination.

According to him, the value added in the textile industry has already risen to fifty-seven percent from thirty-seven percent in 1995. This is a significant achievement for Pakistan which was exporting much of its cotton and then coarse yarn which fetched very low prices abroad which made the experts wonder whether the country was gaining more in foreign exchange through the export of such yarn or spending more.

From the export of coarse yarn to popularizing our garments through well backed brand names is a long way. But this has to be achieved through a systematic process. Such a transformation which can get twenty dollars for a shirt rather than 30 cents through the export of cheap fabrics would mean major transformation in the textile industry and that would need educated and trained workers. Above all, that would need educated manufacturers with a modern outlook and cleaner export practices than they often opt for now. They also have to look for new markets for new products instead of limiting themselves to the traditional markets and the usual buyers.

To achieve such a transformation in the economy, the government has come up with its textile vision along with a leather vision to counter the setbacks to the leather trade. Finance minister Shaukat Aziz has come up with an appeal for job creating industries. The textile industry is the foremost among these industries followed by the leather industry. Popularizing and strengthening the garment industry and exporting the garments with greater efficiency in a highly competitive area can increase the number of the workers employed in the textile industry. Right at the moment the rapidly improving textile machinery is reducing the number of workers it needs. Now one worker in a textile mill does the work of thirty to fifty which was the norm in the old textile industries. So the quality garment industry which is more of a small scale enterprise should be expanded fast and that is where the new employment can come from.

But that has to be the outcome of a truly national enterprise in which the government, the banks, the textile industry and the workers as a whole participate zestfully. The leather garments are coming to be regarded more and more as fashion products. And leather is being used in many new areas. Pakistan has the leather it needs and can supplement it through the import of finer varieties. It has the expertise as well as the skilled workers. Some of the companies like Jaferjee’s have earned a name for themselves and their products.

If the leather vision can expand the industry and make it more of the value added, it will be a very welcome development. Another industry which can provide a large employment and earn considerable foreign exchange instead of the small amount, it does, is fisheries. Fisheries in Pakistan seem to make too many negative headlines including the Karachi fish harbour as the dirtiest harbour in the world and the non- utilization of the Korangi fish harbour after a great deal has been invested on it using external aid. The coastal waters are also getting more and more polluted by the dumping of industrial chemicals and the sewerage of the city.

As a result, we are tending to loose our export market for shrimps, prawns and lobsters. And there is a perennial controversy in regard to allowing foreign trawlers operating in our economic zone. Much of the wrongs including permitting fishing in the breeding season and the use of forbidden nets, appears to be done in the name of helping the smaller fishermen. But they seem to be none the better for that.

An industrial growth of 4.4 percent is said to be achieved this year after a great deal of effort, which is lower than last year’s growth of 7.8 per cent in the large scale sector. But far better than 1999-2000 when a 0.2 per cent rate of growth was achieved.

China achieved its present economic strength by having over ten percent industrial growth for over 10 years altogether. That is the kind of growth we have to aspire for, although substantial export growth is by no means easy and would call for strenuous and imaginative steps.

“Germany’s job figures blow for Schroder” says the headline of the Financial Times, London. It says the unemployment of 9.7 percent of the work-force can be a major threat to the re-election of the German Chancellor in September. The rate of unemployment in Pakistan is much higher but we do not have any reliable figures and our trade unions are weaker and are more interested in getting higher wages for the already employed than in creating employment for the millions of unemployed. So, even the increasing number of employment suicides have no impact on the government.

Nonetheless, the finance minister appealed to the industrialists to come up with job creating investment.Of course, the small and medium industries can be more helpful in that regard. They also need far less capital than large scale industries and usually depend on far lower ratio’s of loans than large scale industries. But they are slow in coming up and find bank loans too expensive while we talk glibly of abolishing interest altogether in the name of Islam.

Far more has to be done by the government to promote such industries than merely announce policies. Industries minister Razzak Dawood talks of protecting the industries.

Even more important is promoting the industries with not only the cooperation of the federal officials but also the provincial and local government officials. It has to become a truly national policy followed by adequate all round measures.