Zardari Woos Textile Industry With Promises of $100b Exports, Gas Supply

Zardari Woos Textile Industry With Promises of $100b Exports, Gas Supply
As his party gears up for the upcoming general elections, former president and Pakistan People Party Co-Chairman Asif Ali Zardari strummed the heartstrings of key stakeholders of the national economy-- Pakistan's core industry of textiles.

Textile and other cotton products and byproducts still lead the pack when it comes to Pakistan's exports. And boosting them is the quickest way to offset Pakistan's grossly imbalanced trade.

Addressing a meeting for members of the All Pakistan Textile Mills Association (APTMA) at their offices in Lahore on Friday, Zardari disclosed to them his dream of spurring textile exports of the country.

Stressing the need for a new charter to revive the national economy, Zardari said that they would all have to work together for the progress and development of the country.

He added that he would not hesitate to sign any such charter that provides a level playing field to the business community.

Outlining his plan for the textile industry, Zardari suggested that agriculture remains the economic backbone of the country and that it can help stabilize the national economy.

As an example, he expressed the desire to expand cotton cultivation to the largely arid region of Jhal Magsi and invited the cotton processors and finished goods industry to invest in the agricultural raw materials supplying core.

He stressed the need to ensure that the right price for cotton is paid to farmers besides working on improving the quality of cotton seed in the country.

Assuring the APTMA members that he was completely aware of the issues faced by the business community, he said that unless (economic) issues of the public are not resolved, they will remain unable to pay taxes to the government and stave off a cruel and crippling economic cycle.

Stressing that unity is the key to success, Zardari made his first salivating offer to textile millers by stating it was now time for textile entrepreneurs to lead key ministries, such as those of textile and finance, in order to take the country forward.

With the supply of reliable and affordable power amongst the chief issues faced by Pakistani industries, Zardari hoped that opening up trade with a country like Iran would enable Pakistan to procure cheap gas as well as the much sought-after liquefied natural gas (LNG).

The PPP co-chairman assured the APTMA that a PPP government would ensure the construction of the gas pipeline from Iran - a project he had signed and inaugurated over a decade ago.

"I will bring gas from Iran for the textile industry of Pakistan to reduce its input cost," Zardari said.

Moreover, he promised that his party's government would also support border trade with the Western neighbor.

Recalling the efforts he and his party had made for the textile industry during their government, Zardari recounted how he had advocated for trade, not aid, in his talks with the European Union (EU) back in 2013.

Referring to the EU's Generalized Scheme of Preference (GSP) Plus, the former president maintained that Bangladesh had taken advantage of the scheme because of its underdeveloped status.

"Around 90% of Indian textile products get a tag of Made in Bangladesh and get shipped to Europe for sale," he noted.

The PPP co-chairman was of the opinion that Pakistani entrepreneurs should learn to sell their products in the international markets with the right combo.

Earlier, APTMA Patron-in-Chief Gohar Ejaz welcomed Zardari along with APTMA Chairman Asif Inam, APTMA North Chairman Hamid Zaman, Senior Vice Chairman Kamran Arshad and Secretary General Raza Baqir.

Ejaz, in his address, pointed out that Pakistan has the potential to earn at least $25 billion a year through textile exports alone.

He said the industry had set a target of doubling that to $50 billion in the next five years besides committing to set up 1,000 garment units with 500,000 stitching machines against a total investment of $7 billion. This, he projected, would add another $20 billion per annum to the country's textile exports apart from generating employment for 700,000 workers.

These garments units, he said, plan to be established near major textile-producing cities such as Lahore, Sheikhupura, Faisalabad, Kasur, Multan, Sialkot, Rawalpindi, Sukkur, Hyderabad, Karachi, and Peshawar.

Ejaz blamed the decline in exports and de-industrialization in Punjab on the absence of a Regionally Competitive Energy Tariff (RCET).

He argued that a preferential RCET was not a subsidy. Rather, he noted that without RCET, exporters in Pakistan could not compete in the international markets, as Pakistan has the highest energy tariff in the region.

The high price of energy, together with its intermittent and curtailed supply, was a recipe for de-industrialization, he explained.

He urged the government to maintain supply at 9 cents/kWh for power and $9/MMBtu for gas for the export sector across Pakistan.

Moreover, he suggested the establishment of power plants dedicated to serving the industrial sector and the wheeling of electricity under the CTBCM regime, which requires the full support of the Finance Division.

Ejaz also sought restoration of SRO 1125, refund of all sales tax, TUFF and other dues, working capital lending facility besides a moratorium on debt, clearance of all imports for export-oriented sectors, zero-rated industries whether against L/Cs or cash against the document, permission to open L/Cs for raw material machinery, spare parts and other items, the extension of existing export discounting mechanism by the State Bank of Pakistan (SBP) to include yarn and cloth and equitable treatment for all textile products in terms of export discounts.

Other office bearers of APTMA demanded patronage to the textile industry to increase exports and provide additional jobs to unemployed youth.

They also highlighted issues confronting the growth of the textile industry in Pakistan.

Syed Murtaza Mahmud, Federal Minister for Industries and Production and Saleem Mandviwalla, Chairman Senate Standing Committee on Finance and Revenue also present on the occasion.

The writer is a senior correspondent at The Friday Times with a focus on politics, economy and militancy.