KARACHI, Jan 7: Mismanagement of textile quota and export policy has resulted in under utilization of majority of European Union (EU) textile categories during the quota year (2003) , shrinking market share of exporters at a critical juncture when the free market era is around the corner.
Whereas India and China recorded over shipment in majority of EU textile categories, the Pakistani exporters were unable even to utilize their bonafide quota ceiling and remained below the full utilization level.
Barring a few fast running or 'hot cake' categories the exporters (Pakistani) could not fully utilize most of the categories and closed the quota year (2003) with a dismal performance, which should have been the other way around had there been proper direction and devotion from the policy makers.
These and other details could be taken from the EU's website and that of Quota Supervisory Council (QSC) as both show quota utilization figures for the year 2003.
Both India and China adopted aggressive export policy not only to fully utilize their allocated quotas but even to go for over-shipment in order to allow their exporters to capture maximum number of buyers ahead of January 1, 2005, when quotas will come to an end and free market era will start.
Exporters are questioning the wisdom of policy makers towards adopting 'restrictive' export policy and the Commerce Minister Humayun Akhtar Khan is on record to have said that a commitment had been made with the EU to avoid over-shipment.
On the other hand, China and India took an aggressive posture, which resulted in over-shipment in most of the EU quota categories. According to the EU's website (January 2, 2004), India out of 19 quota categories has managed to burst the ceiling (over shipment) in nine categories. Similarly, China had made over shipment in 12 categories and both are likely to improve upon as the figures get matured in due course.
Contrary to this, Pakistani exporters who are yet to burst the ceiling in any categories may be able to do so in a couple of 'hot cake' categories such as 20 (bedlinen), 5 (knitted jersey) or some of other categories.
But the most glaring example one could quote is that India did not only perform well in fast running quota categories but also did well in slow moving categories and managed to overship them.
The EU's website further discloses that Indian exporters managed to burst the ceiling in category 7 (blouses) at 101.93 per cent whereas their counterparts in Pakistan only utilized it by 50.40 per cent. One could argue that each country has its own advantages but who will tell about our advantages and where they have been used as quota utilization figures do not show any such performance which could be worth mentioning.
During the fiscal 2002-03, the then commerce minister Abdul Razak Dawood took a policy decision to go for overshipment and adopted aggressive export policy and the country for the first time in its history managed to break the psychological barrier of $9 billion in exports and touch record level of over $10 billion.
The other achievement of former commerce minister and his managers headed by the then secretary commerce Mirza Qamar Baig were lowest quota premium prices in the open market and getting 15 per cent extra market access and duty free imports from the EU.
Against this if we look at the present situation most of quota categories may remain under utilized and the quota premium prices during the out-going quota year 2003 were the highest in the history of the country. One could also say that high premium prices could be one of the factors for under utilization of textile quota categories.