A $10 billion textile export by Pakistan by the year 2005 is ideal, but not impossible if the right efforts are made by the government and the textile sector— the largest industrial group, acting in an earnest concert.

Commerce minister Razak Dawood wants this target to be achieved three years from now, in fact two years, when his textile vision 2005 comes to an end.

But 2005 is the year when the quota system for textile exports largely to the west comes to an end, and the free-for-all or survival of the fittest in the global textile market begins. When that happens the global textile trade will be an entirely different ball game than it is now.

That is also the year when China with its expanded textile sector will be moving into the world textile market in a far bigger way then it has been doing. Simultaneously many other textile exporting countries including those of East Asia like South Korea, have been expanding their textile sector to face the challenges to come in 2005 and afterwards and to exploit the opportunities which the end of the quota system will offer to them.

But Razak Dawood is optimistic about achieving the $10 billion target by 2005 based on the fact that Pakistan’s overall exports had gone up by 15 per cent in the first four months of the current financial ending October — 5.5 per cent ahead of the target for the period. Textile exports to the quota countries have increased by 24 per cent over the exports in the same period last year. On that basis he is confident Pakistan will be able to achieve the overall export target of $10.4 billion this year, over last year’s $9 billion exports.

Razak Dawood is optimistic about achieving the #10 billion exports of textiles by 2005 as he argues that the billion dollars invested by the textile sector on modernization and expansion of the industry has begun paying dividends.

But textile experts argue that total additional investment of five to $7 billion is needed in the textile sector to prepare it adequately for the global challenges to come and enable Pakistan export more of value-added textiles.

Pakistan has to move into garments in a big way, truly value-added garments, if it has to virtually double the earnings from textile exports within three years. In fact it has no other option as textiles form over 60 per cent of its exports and if that is hurt the entire export sector will be hit hard.

All this talk of greater market access to U.S and the greater access we have achieved in the European Union will then become a thing of the past. Only those countries will matter in the textile trade globally which are on the ball vigilantly and try for the best results.

Among the many inputs that Pakistan needs to develop a truly resilient textile export sector will be a larger cotton output. The minister says while the target for cotton output this year is 12 million bales, actual output is expected to be 10.5 million bales. The rest will have to be imported which can increase the cost of production and exports. But then, Pakistani cotton often costs more than cotton from other countries like central Asia.

Pakistan hence has to go all out to raise the cotton output to 15 million bales, using the most modern methods of cultivation harvesting, storing and transportation. The ‘clean cotton’ campaign of Razak Dawood is a move in the right direction. Clean cotton can not only earn more in the export market but also help the textile industry at home and fetch higher prices for the growers. The gains for the country from clean cotton is estimated at around 300 million-dollars.

But instead of producing too much cotton to feed the textile mills achieve the $10 billion export target by 2005, the textile industry has to focus more and more on value-added textiles, particularly in the area of high priced garments, which may need imported cotton of the Egyptian kind.

Pakistan’s textile industry has been hit hard by the high cost of electricity and high interest rates, apart from numerous taxes. Paucity of bank loans has also been a major factor. But the governor of the State Bank of Pakistan, Dr Ishrat Husain has been urging the banks to be more helpful to the genuine industrial investors.

And in the area of export refinance, while the rupee loans are available at 8 per cent interest, dollars loans are available at 4 per cent, which suits the exporters eminently.

The textile industry not only needs quality cotton at competitive prices and not at the whimsical rates dictated by the ginners, but also textile machinery at competitive prices. Pakistan’s textile machinery manufacturing capacity would make little headway because of the oppositions of textile magnates who preferred to import such machinery, Under-invoice the imports and keep a part of the money abroad. Too many of the industries in Pakistan have been born sick through this process, while the industrialists flourished, including in the 1990s when a number of textile mills came up country.

Razak Dawood talks of his Engineering Vision 2010 to develop this key sector. This sector now exports goods worth only 270 million dollars, which is too small. He wants it to export far more equipment and earn more. But the Vision is not giving due importance to the textile sector where the need of the times is for import substitution, particularly for import of textile machinery.

Of course, it is not easy to manufacture sophisticated textile machinery of an advance kind but we are importing even the more common textile machinery. The All Pakistan Textile Mills Association has been pleading for allowing import of textile machinery and parts from India, which is far cheaper than the machinery imported from elsewhere. But the political policy of the government stands in its way.

Not that the Indian-made textile machinery or its parts are not coming into Pakistan. But they comes through other sources or routes and that costs more APTMA wants this costly subterfuge to be ended.

Pakistan cannot be a textile exporting giant in the world as well as grow large quantities of cotton without its own textile machinery-making capacity and achieving economy in every sector of the textile trade in a highly competitive area.

The end of the quota system would pose a tremendous challenge to the textile manufacturers and exporters. They have to become far more innovative and competitive. They have to look for new markets and rely on new products. They have to move around the world more creatively instead of confiding their movements to the traditional markets. And they have to work for lesser profits per unit of sale rather than focus on higher profits and less sale. APTMA has to have large research units in the area of manufacture, sale and exports instead of relying on the government excessively in such critical areas.

Setting a target like $10 billion textile exports by 2005 is easy, but achieving that is arduous and complex task. All the elements involved in the manufacture and export have to work together earnestly, with the government ready to act quick where it is needed and when it is needed. The days of a lax or conventional approach in this critical area are over, particularly when the textile industry is Pakistan’s primary industry and is other largest foreign exchange earner and forms two - thirds of the exports.

The refusal of Alan Larson, under-secretary of the USA for economic affairs and agriculture to increase the quotas for any other category of textiles besides man - made bedding items shows how the rich countries are safeguarding their textile interests or industry. Pakistan has hence to know how to safeguard its textile interests in a highly competitive world where each country wants to protect it own industry, trade and employment.