For textile sector mayday call
Pakistan economy pivots around two essentials, ie, textiles and energy because 60 percent of our exports constitute textiles, while 30 percent of imports comprise energy.
This becomes more critical when various studies project the export potential at $50 billion per year by 2030, though they were worth only $16.5 billion in FY 2022-23 with the historical maximum reaching $22.1 billion in FY22.
Some sources put this potential even at $100 billion. If realised, it can easily pull us out of the perennial malaise of the deficit in balance of payments, the primary cause of all of our economic woes. What further accentuates this inference is that the textile sector employs about 45 percent of the total labour force associated with the manufacturing sector.
Also, the industry is heavily dependent on cotton, therefore, any disturbance in the cotton crop also affects the performance of the sector and the economy.
Cotton’s challenges have only grown with time. Its yield was 615 kg per hectare in 1990 and 617 kg in 2020, which is a stark reflection of the poor performance in this segment, especially when China’s yield, now touching 2027 kg/hectare, grew by more than 150 percent during the said 30 years.
CPEC 2.0: from Shenzhen can Pakistan learn?
Prime Minister Shehbaz Sharif recently praised the remarkable success story of Shenzhen, heralding its evolution into the city of the future. Once a modest fishing village, Shenzhen has emerged as a dynamic hub of modern technology, development, and innovation. With its GDP growing steadily, Shenzhen’s journey of transformation commenced in 1978 with a modest GDP of $40 million, soaring to an impressive $500 billion with a population of 13 million.
Impressed by Shenzhen’s achievements, Prime Minister Shehbaz Sharif announced Pakistan’s intention to adopt the Shenzhen model of development. While this declaration demonstrates a positive step towards learning from Shenzhen’s experience, it raises the question: Can Pakistan truly replicate Shenzhen’s success?
Before answering this question, it is essential to examine the factors driving Shenzhen’s transformation. What reforms did China implement? What institutional mechanisms and infrastructure facilitated Shenzhen’s growth?
LPG jacked up by Rs50/ kg
The price of liquefied petroleum gas (LPG) has increased by Rs50 per kilogramme, according to Irfan Khokhar, Chairman of the LPG Distributors Association.
Khokhar accused LPG marketing companies and plant operators of defying government-set prices and selling LPG at inflated rates.
He stated that the black marketing by LPG companies is rampant, with no LPG available at the official rate anywhere in the country.
The Oil and Gas Regulatory Authority (OGRA) had set the official price at Rs234.60 per kg, but the market price has soared to Rs280-285 per kg.
Following the price hike, the cost of a domestic LPG cylinder has increased by Rs600, now selling at Rs3,370 instead of the official Rs2,770. Similarly, commercial cylinders are now priced at Rs12,435, up from the government-set price of Rs10,715.
Khokhar criticised the government for yielding to the gas mafia, stating that the black marketing will continue until the authorities take action against the powerful LPG cartel.
A poorly-crafted budget
The sombre policies of the poorly-crafted federal budget for 2024-2025 could hinder digital prosperity and significantly impact the IT sector, which had recently begun gaining momentum after Covid-19. This situation might lead to a potential fiasco, exacerbating the brain drain of highly-skilled IT professionals.
Policy makers and the elite are seen as neglecting the country’s foundations while enjoying increasing privileges funded by the hard-earned income of the salaried class. It appears that the budget, seemingly prepared without benefiting any industry, is strangling the IT sector.
Although the government allocated a budget of Rs79 billion for the IT sector, IT professionals have raised grave concerns, deeming the allocation a dead loss. Professor Tahir Mehmood Chaudhry, Chairman of the Computer Society of Pakistan (CSP), a prominent IT think tank, criticised the establishment of IT parks or software technology parks as merely attempts to make abandoned places commercially viable, benefiting landlords without providing necessary infrastructure or cost-effective facilities. With 13 software technology parks proving ineffective, many IT companies or freelancers have opted to relocate their offices to more suitable domestic or low-cost commercial areas. The government’s policies are not yielding fruitful results, especially for end-users. The IT industry was entirely disregarded when forming tax policies in the budget.
For textile sector mayday call
Pakistan economy pivots around two essentials, ie, textiles and energy because 60 percent of our exports constitute textiles, while 30 percent of imports comprise energy.
This becomes more critical when various studies project the export potential at $50 billion per year by 2030, though they were worth only $16.5 billion in FY 2022-23 with the historical maximum reaching $22.1 billion in FY22.
Some sources put this potential even at $100 billion. If realised, it can easily pull us out of the perennial malaise of the deficit in balance of payments, the primary cause of all of our economic woes. What further accentuates this inference is that the textile sector employs about 45 percent of the total labour force associated with the manufacturing sector.
Also, the industry is heavily dependent on cotton, therefore, any disturbance in the cotton crop also affects the performance of the sector and the economy.
Cotton’s challenges have only grown with time. Its yield was 615 kg per hectare in 1990 and 617 kg in 2020, which is a stark reflection of the poor performance in this segment, especially when China’s yield, now touching 2027 kg/hectare, grew by more than 150 percent during the said 30 years.