Islamabad: Pakistan’s textile exports fall dramatically as industry leaders warn of manufacturing hub “emergency” and the sector is hampered by a national energy crisis that forces factories to shut down daily. Is set to. South Asian countries are in the midst of a dire economic crisis, with runaway inflation, depletion of rupees and reduced foreign exchange reserves hampering energy imports.
Meanwhile, according to government statistics, heat waves have caused a surge in electricity demand, leaving a shortage of more than 7,000 megawatts (one-fifth of Pakistan’s power generation capacity) one day this month. Energy shortages have hit Pakistan’s key textile industry. Pakistan supplies everything from denim to bed linen to the US and European markets, accounting for 60% of the country’s exports.
“The textile industry is in a state of emergency,” Kasim Malik, vice president of the Chamber of Commerce at Sialkot’s manufacturing hub, told AFP. Malik said that “unplanned” power outages disrupted the textile supply chain and “caused millions of rupees in losses” as authorities were forced to distribute power supplies in staggered power outages. “. “If power outages continue, exports could decline by more than 20%,” warned Sheikh Lukman Amin of the Pakistan Ready-made Garment Manufacturers and Exporters Association.
Larger factories tend to have independent power plants, leaving small and medium-sized factories in cities such as Lahore, Faisalabad and Sialkot the most exposed. Owners are dissatisfied with 8-12 hours of power outages each day and face the dilemma of reduced production and the installation of gasoline-powered generators. This is also a sharp rise in costs. “We can’t accept new orders because we’re behind previous orders,” said Usman Arshad, owner of Sialkot’s garment factory. “Things can’t keep going like this.”
Despite the country’s economic hardship, textile exports surged 28% in the July-May 2021/22 fiscal year to a record $ 17.67 billion, all Pakistan textile factories. The association reported this week. Pakistan’s industry was supported by the end of the coronavirus pandemic when it was released from regulation earlier than its regional rivals India and Bangladesh. Prime Minister Shehbaz Sharif’s new government will announce a budget on Friday to turn around Pakistan’s miserable finances. The ledger is expected to contain a series of steps to persuade the International Monetary Fund to revive the stagnant $ 6 billion bailout package.
Meanwhile, Pakistan has allocated 40% of its budget to tackle debt, tackled inflation surges and political instability, announced a budget of 9.5 trillion rupees ($ 47 billion) on Friday, with more than 40% of the country’s huge foreign countries. And allocated to cover domestic debt. Prime Minister Shebaz Sharif has blamed Pakistan’s economic predicament for his predecessor Imran Khan being banished in April by a distrust resolution and promoting a national campaign for early elections.
But analysts say the problem stems from decades of poor economic management by successive government and military rulers who have failed to tackle endemic corruption and widespread tax avoidance. The budget announced by Finance Minister Mifta Ismail on Friday allocates Rs. 3.95 trillion just to cover the country’s huge $ 128 billion debt. “The lack of foresight (of the previous administration) has destroyed social structures, stagnated economic growth, and declining national integration,” he told parliament.
The $ 6 billion IMF relief package signed by former Prime Minister Khan in 2019 is complete as his government disagreed with an agreement to reduce or terminate some subsidies and improve revenue and tax collection. Not implemented in. Islamabad has received $ 3 billion so far and the program is expected to end later this year. Authorities are calling for an extension of the program until June 2023 and the release of the next $ 1 billion tranche. Sharif vowed to revitalize the dying economy, but analysts say his fragile government was unable to make harsh decisions.
The new budget has allocated 1.523 trillion rupees to the defense forces of a country that regularly swallows large quantities as a result of permanent tensions with neighboring India. Development projects aiming for 5% growth in the fiscal year starting July 1st will be lined up with about 800 billion rupees, and the economic growth rate for the next year is expected to be about 6%. “Theoretically, this is a reduced budget aimed at checking for rising inflation,” said independent economist Rashid Alam. “But in reality, it reflects our country’s priorities of devoting itself to national security, not national welfare,” he added. – AFP
