KARACHI, July 22: Business leaders offered mixed reaction to the Trade Policy 2005-06 announced by Commerce Minister Humayun Akhtar Khan on Thursday. There was a feeling amongst stakeholders that the policy again is focused on the textile sector alone.
While textile tycoons hailed the policy, some business leaders expressed apprehensions regarding the implementation of measures announced. They say the government has failed to facilitate industrial and trade activity to the level of its commitments over the last three years. There had been assurances for developing infrastructure and other facilities for the industry such as effluent treatment plants, adequate supply of water, power and gas, but even today the industry is confronted with these problems.
Dr Mirza Ikhtiar Baig, Chairman, SITE Association of Industry, welcomed the decision to establish the Skill Development Board to support the textile garment sector. He also appreciated the incentives announced for gem and jewellery, footwear, marble and granite sectors, classifying them as industry.
However, Dr Baig said the trade policy is silent about SMEs, the most important sector of the industry. “The trade policy does not offer incentives to the value-addition sector.”
Aptma Chairman Arif Saeed said that the success of the policies could be gauged from the fact that for the fourth consecutive year there had been growth in exports. The textile industry has particularly contributed to the strong export performance, especially in the last year when the increase was not as a result of unit price increase but as a result of aggressive capacity expansion and unprecedented investment.
He said that Aptma appreciated the renewed focus, capacity building to cope with the demands of the WTO and the critical important market access, including free trade agreements, which would determine the pace of export growth in future. “The commerce ministry worked very closely with the stakeholders over the years and growth in the textile industry is a reflection of this partnership.”
Mr Saeed said: “The greatest growth potential going forward was likely to be in the apparel and home textile sector, as we already have a world-class basic textile industry.” In this regard, the skill development effort is especially critical, he adds.
Fawad Ijaz Khan, Chairman, Pakistan Leather Garments Manufacturers and Exporters Association (PLGMEA), has expressed his resentment over the step-motherly treatment meted out to the leather garment industry in the trade policy. “The commerce minister has announced relief package for the textile garments industry, but the leather garments industry has been totally ignored, although this is a similar industry and is facing more problems as compared to the textile garments industry.
He said the PLGMEA had forwarded its detailed proposals, seeking a 20 per cent duty on export of raw hides/skins and wet blue leather after consent of all sub-sectors of the leather industry and the commerce minister had indicated that he would impose this duty, but it was not announced in the trade policy.
Mr Khan said the association had also proposed to Prime Minister Shaukat Aziz to grant a six per cent R&D support to the leather garment industry similar to the one announced for the textile garments industry. But this demand was also not accepted by the ministry.
EPB Chairman Tariq Ikram had recommended to the ministry of commerce to grant a 10 per cent R&D to leather garment exporters.
However, he appreciated the decision to increase the sample limit for leather garment exporters from 50 to 100 samples. The establishment of leather footwear institutes and hiring of international consultants will be instrumental in the development of this sector in Pakistan. The ministry of commerce has devised special trade promotion programmes for the EU and the US which will increase exports to these regions. Mr Khan has lauded the decision to increase productivity of exporters by increasing working hours and days. The leather garments are a labour-intensive industry and if due support is not given it will result in widespread closures and loss of thousands of jobs.
Former chairman, Rice Exporters Association of Pakistan, Abdul Raheem Janoo, said that import of colour setter machinery from India should have been allowed in the trade policy. He says this machine costs around Rs10 million in the world market, but importing from India it would cost only Rs3 million.
Mr Janoo said that by value addition, export of rice could go higher and reach the one-billion-dollar mark in a year time. “We are already importing parboil machines from India and if the government has allowed import of colour setters it could help in value addition.
He also suggested that the government should have reduced the negative list by increasing the number of items to be imported from India. However, he said generally the new trade policy was balanced.
Former chairman, Korangi Association of Industry, Manzar Alam, said the new trade policy would help boost exports of textile goods.