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‘Pakistan has done import liberalisation more than required’

ISLAMABAD: There is no condition under International Monetary Fund (IMF) for further trade liberalisation and Pakistan has already done import liberalisation more than its actual requirement, Dr Waqar Masood Khan, Federal Secretary Ministry of Textile Industry said.

He was speaking as chief guest at 2-day capacity building programme for economic journalists organised by Pakistan Institute of Trade and Development and Journalists for Democracy and Human Rights (JDHR).

Dr Waqar, on a question of elimination of GST zero rating for textile along with other five export oriented sector under IMF programme, said that textile policy seeks to provide true zero rating of textile exports, not the zero rating of textile sales within the country. Elimination of sales tax zero rating of textile sector, in the absence of speedy disposal of refund cases, would lead to blockade of refunds, fake refund claims and flying invoices in the country.

He predicted that this year some 12.1 million bales of cotton production is expected as against the last year’s production of 11.4 million bales. Some 7.3 million bales have been reportedly ginned by November this year and some 40 percent more cotton will be available to local industry this year and there would be more yarn availability, he added.

There are proposals to ban the export of yarn or imposition of regulatory duty on it for ensuring its availability for downstream industry.

Secretary informed that Pakistan during the last decade have over done the import liberalization. Import tariffs, which were ranging between 100 percent to 200 percent in 1992 have been brought down to a maximum of 25 percent. However, he informed that to cope up with the situation of surge in imports, Pakistan has already bound its rates at 70 percent with the World Trade organisation to safeguard its trade interests.

He informed that the government will bring in new law for registration of textile sector that would also make it mandatory for the sector to improve quality and new law would subject textile to abide by certain standards.

Defending the $25 billion export target for textile exports within next five years, Secretary Textile said that although this target is ambitious but not unrealistic. Target has been fixed keeping in view the recommendation of three sub-sectors on clothing, home textile and textile as well as conversion of one bale of cotton in to earnings of $2000 as against the existing $1000.

He said that textile policy aims at improving cotton quality from picking to ginning and processing level, and technology up-gradation fund would help ginning and other value chain of value added textile units to replace their 50-year old machinery. This would help regain the market and value of our textile products that the country has lost during last few years. He negated the impression of ignoring the clothing sector in the textile policy and categorically said that clothing sector has been kept in prime focus while finalizing the policy and highest rate duty drawback have been allowed to garment sector.

He said that Bangladesh has an edge owing to cheap labour, as the wages in textile sector of Bangladesh are 50 percent less than the minimum wages applicable in Pakistan. Ministry of Textile Industry would require textile units to arrange pick and drop facility, and play schools for the children’s of women workers and separate places for work for women workers under EOBI scheme and social security scheme so that women participation is increased. staff report

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