Economy needs progress not stalemate
Politicians and civil society in Pakistan should focus on solutions that would address problems faced by our economy to promote progress rather than stagnation.
Currently, we are facing a stalemate which is a situation where neither group involved in an argument can win or get an advantage and no action can be taken. Promoting political unity and dialogue must be the priority.
Unity should be geared towards implementing effective economic policies, fostering transparency and accountability, and encouraging ethical behavior among public officials and citizens. To achieve this would require a paradigm shift in our culture.
For the time being, textiles is our best hope. We have reasonable textile infrastructure and trained workforce, still we are way behind Bangladesh that entered textiles when we were an important global player in basic textiles.
We must remove the hurdles that keep us behind our neighbors in a sector where we have natural advantage. The Bangladeshi did not follow the textile models of India and Pakistan. They procured basic textiles (that are inputs for value-added textiles) for both its neighbours and started making apparel from imported inputs.
Apparel production has two advantages for any country. The first is that it is highly labour intensive and the other is that the value-addition in apparel is very high. This approach adopted by Bangladesh some 35 years back has resolved the problem of unemployment in the country and earned it huge foreign exchange to freely finance its imports for development of the country.
Pakistan currently lags far behind Bangladesh in labour efficiency and productivity. Pakistan should invest in technology and training to enhance the skills and productivity of its workforce.
By doing so, it can reduce the cost of production and compete on price. The textile product range of Pakistan is limited. Bangladesh has a more diversified product range and is striving to increase it further.
Pakistan needs to expand its product range to include a variety of higher-value added products, such as high-end fashion items, sports apparel, and specialised fabrics for industrial use. This will enable it to target niche markets and cater to different customers.
Inadequate infrastructure is another weakness that textile exporters face in Pakistan. It must improve its port facilities and logistic infrastructure to ensure the timely delivery of goods. This will also reduce transportation costs and make the country more competitive. Textile sector in Pakistan is not adequately focused on sustainability.
Bangladesh’s government and the private sector have given the right attention to sustainable production. Consumers today are looking for sustainable and environmentally-friendly products. Pakistan should invest in sustainable manufacturing processes and raw materials to cater to this demand.
It is regrettable that most international trade agreements like FTAs we signed with numerous countries have helped other countries and did not increase market access for Pakistan. Whatever market access is available to Pakistani textiles in larger markets of the EU and US came because of general policies of these governments.
No real free market access is available to Pakistan in these markets that are the major buyers of global textiles. Both India and Bangladesh have larger access not only in these markets but also in Japan and Australia.
Pakistan should focus on strengthening its trade agreements to establish a favourable environment for trade. This will also help to minimise tariffs and enhance market access.