A separate textile policy was announced by the government on Wednesday, in response to an old demand by Pakistan’s most powerful industrial sector. From the sector problems addressed in it, one can see the hand of the economists working in tandem with Finance Minister Mr Shaukat Tarin, who often declares that he will do nothing without consulting the sector managers involved.
The idea is to boost textile exports from $17.8 billion to $25 billion. Critics tend to forget that the policy extends over four years and quietly counts on things getting better beyond 2009, when the power situation in the country gets better and the world economy gradually moves out of recession, creating demand for Pakistani goods. Yet, the promise of no load-shedding to the sector “right now” is significant and will take some doing.
There is a subsidy of Rs 87 billion for the sector over four years. The “real trade policy” announced earlier was for one year and had targeted commodities where Pakistan faced less competitive challenge in the international market. The four-year period for textiles envisages recovery not only in export but a period of change in the sector, focusing on the upper end of the global market rather than on the cheap low-quality products in which Pakistan has reached a saturation point.
One can’t say that the policy-framers have not paid attention to detail. Subsidy will go into helping the sector refinance loans too so that they can come back from the brink of bankruptcy caused by the various indigenous and extraneous factors in the economic crisis. Small-time producers of yarn who sell to the big exporters will be treated to some extent as exporters and will be partially subsidised. The cost of social security for women employed by the sector will be picked up by the state.
The vagueness over such sub-sectors as ginning, spinning, weaving, knitting, processing, fashion designs, handloom and handicrafts, carpets, technical textiles, etc, will come to the fore in more complicated ways as the affectees approach the bureaucracy for quick resolution of bottlenecks. The sector has been in trouble for a long time because of flaws native to Pakistan, but after 2005 particularly because of the withdrawal of the quota system. Now Pakistan has to sell cheaper than India and Bangladesh to be in the market, and the yardstick is not only quality.
The textile sector is the backbone of Pakistan’s export economy. It is also the big employer and there are cities like Faisalabad where generations of workers are associated with their cotton and textile factories. Attracted to the field, smaller investors have crowded the medium scale market with high employment, in the power looms sector. If the Textile Policy concentrates on exports, it will have to direct the power loom sector to become more closely associated with exports. Local glut is to be feared above all.
There are pledges given to the development of infrastructure that will be more difficult to fulfil. Again, the calculation is that the availability of electricity will get better after 2009, and that doesn’t take into account the infrastructure of the national power grid itself. Half the time the citizens don’t know if it is load-shedding that has hit them or a breakdown. But in 2010 somehow the textile sector and the power looms — where the workers are becoming violent by the day — will have the power supply they need! It is not a great assumption.
Then there is the law and order situation which balks foreign buyers and investors. It has been bad for the past 25 years when the state was busy waging jihad with non-state actors and has now become associated with loss of territory. One complaint of the textile exporters has been the delays caused by acts of terrorism in the performance of their contractual obligations to foreign buyers.
Critics foresee problems with the interest rates policy aimed at keeping the economy burning low rather than high. They also foresee hanky-panky in the field of subsidies. It is almost impossible to predict when the Tribal Areas become pacified enough to allow setting up of factories there with exports going to the US without duty. There is also no prospect yet of the US giving Pakistan a leg-up through a free-trade agreement that will benefit our textile sector above all. But there is wisdom in trying harder against challenges that have been allowed to become formidable over the years. *
Second Editorial: Pakistani ‘preachers’ in Somalia
Seven Pakistani preachers apparently doing “tabligh” among the Muslims of Somalia have been killed by someone inside a mosque in a Mogadishu locality. The report says the 25 people in the mosque were “mostly Pakistanis”. The Somali extremist-Islamist organisation, Shabaab, which does its own share of killing, has vowed revenge on the killers of Pakistani preachers.
Reports have been trickling in about Pakistani fighters in the Somali civil war. In June, the Economist had noted: “Other al-Qaeda fighters have come [to Somalia] from Pakistan and Afghanistan and may recently have helped assassinate Mogadishu’s police chief as well as clan elders and local journalists”. The Pakistani press has recently quoted the Somali parliament speaker Sheikh Aden Mohamed Madobe as saying, “Those fighting the government are being led by a (former) Pakistani army general. They are burning the flag and killing people”.
Al Qaeda has variously thought of making Somalia and Iraqi Kurdistan its home after things get rough in Pakistan. In his book, written in criticism of the deployment of Pakistani troops in Somalia under the UN auspices in 1993, Maulana Masood Azhar of the banned Jaish-e-Muhammad had indirectly confirmed Al Qaeda’s focus on Somalia as a possible home. Osama bin Laden had boasted to the BBC of killing 24 Pakistani troops in Mogadishu.
Masood Azhar was in Somalia in 1993, according to his own book. He was caught in 1994 in Anant Nag in Held Kashmir while trying to reorganise his militia. His route had described this pattern: he went on a Pakistani passport to Saudi Arabia and from there to Dhaka on a Portuguese passport, and then from Dhaka to New Delhi. The Pakistani preachers killed in Somalia on Wednesday were all from Karachi. Clearly, those who killed them did not see them as harmless tablighi persons. Islamabad should not be surprised if Somalia becomes the victim of a full-fledged Pakistani assault; and thereafter becomes a base for terrorist operations against Pakistan.
The idea is to boost textile exports from $17.8 billion to $25 billion. Critics tend to forget that the policy extends over four years and quietly counts on things getting better beyond 2009, when the power situation in the country gets better and the world economy gradually moves out of recession, creating demand for Pakistani goods. Yet, the promise of no load-shedding to the sector “right now” is significant and will take some doing.
There is a subsidy of Rs 87 billion for the sector over four years. The “real trade policy” announced earlier was for one year and had targeted commodities where Pakistan faced less competitive challenge in the international market. The four-year period for textiles envisages recovery not only in export but a period of change in the sector, focusing on the upper end of the global market rather than on the cheap low-quality products in which Pakistan has reached a saturation point.
One can’t say that the policy-framers have not paid attention to detail. Subsidy will go into helping the sector refinance loans too so that they can come back from the brink of bankruptcy caused by the various indigenous and extraneous factors in the economic crisis. Small-time producers of yarn who sell to the big exporters will be treated to some extent as exporters and will be partially subsidised. The cost of social security for women employed by the sector will be picked up by the state.
The vagueness over such sub-sectors as ginning, spinning, weaving, knitting, processing, fashion designs, handloom and handicrafts, carpets, technical textiles, etc, will come to the fore in more complicated ways as the affectees approach the bureaucracy for quick resolution of bottlenecks. The sector has been in trouble for a long time because of flaws native to Pakistan, but after 2005 particularly because of the withdrawal of the quota system. Now Pakistan has to sell cheaper than India and Bangladesh to be in the market, and the yardstick is not only quality.
The textile sector is the backbone of Pakistan’s export economy. It is also the big employer and there are cities like Faisalabad where generations of workers are associated with their cotton and textile factories. Attracted to the field, smaller investors have crowded the medium scale market with high employment, in the power looms sector. If the Textile Policy concentrates on exports, it will have to direct the power loom sector to become more closely associated with exports. Local glut is to be feared above all.
There are pledges given to the development of infrastructure that will be more difficult to fulfil. Again, the calculation is that the availability of electricity will get better after 2009, and that doesn’t take into account the infrastructure of the national power grid itself. Half the time the citizens don’t know if it is load-shedding that has hit them or a breakdown. But in 2010 somehow the textile sector and the power looms — where the workers are becoming violent by the day — will have the power supply they need! It is not a great assumption.
Then there is the law and order situation which balks foreign buyers and investors. It has been bad for the past 25 years when the state was busy waging jihad with non-state actors and has now become associated with loss of territory. One complaint of the textile exporters has been the delays caused by acts of terrorism in the performance of their contractual obligations to foreign buyers.
Critics foresee problems with the interest rates policy aimed at keeping the economy burning low rather than high. They also foresee hanky-panky in the field of subsidies. It is almost impossible to predict when the Tribal Areas become pacified enough to allow setting up of factories there with exports going to the US without duty. There is also no prospect yet of the US giving Pakistan a leg-up through a free-trade agreement that will benefit our textile sector above all. But there is wisdom in trying harder against challenges that have been allowed to become formidable over the years. *
Second Editorial: Pakistani ‘preachers’ in Somalia
Seven Pakistani preachers apparently doing “tabligh” among the Muslims of Somalia have been killed by someone inside a mosque in a Mogadishu locality. The report says the 25 people in the mosque were “mostly Pakistanis”. The Somali extremist-Islamist organisation, Shabaab, which does its own share of killing, has vowed revenge on the killers of Pakistani preachers.
Reports have been trickling in about Pakistani fighters in the Somali civil war. In June, the Economist had noted: “Other al-Qaeda fighters have come [to Somalia] from Pakistan and Afghanistan and may recently have helped assassinate Mogadishu’s police chief as well as clan elders and local journalists”. The Pakistani press has recently quoted the Somali parliament speaker Sheikh Aden Mohamed Madobe as saying, “Those fighting the government are being led by a (former) Pakistani army general. They are burning the flag and killing people”.
Al Qaeda has variously thought of making Somalia and Iraqi Kurdistan its home after things get rough in Pakistan. In his book, written in criticism of the deployment of Pakistani troops in Somalia under the UN auspices in 1993, Maulana Masood Azhar of the banned Jaish-e-Muhammad had indirectly confirmed Al Qaeda’s focus on Somalia as a possible home. Osama bin Laden had boasted to the BBC of killing 24 Pakistani troops in Mogadishu.
Masood Azhar was in Somalia in 1993, according to his own book. He was caught in 1994 in Anant Nag in Held Kashmir while trying to reorganise his militia. His route had described this pattern: he went on a Pakistani passport to Saudi Arabia and from there to Dhaka on a Portuguese passport, and then from Dhaka to New Delhi. The Pakistani preachers killed in Somalia on Wednesday were all from Karachi. Clearly, those who killed them did not see them as harmless tablighi persons. Islamabad should not be surprised if Somalia becomes the victim of a full-fledged Pakistani assault; and thereafter becomes a base for terrorist operations against Pakistan.
