The Pakistan Institute of Development Economics (PIDE) – in collaboration with the Research for Social Transformation & Advancement (RASTA) program and the Pakistan Society of Development Economists (PSDE) – held its first-ever Economy Festival (EconFest) at the Alhamra Art Centre, Lahore.
The two-day event offered opportunities to learn and debate some real issues of Pakistan’s economy in 34 thought-provoking sessions featuring more than 100 distinguished speakers. Patron-in-Chief of All Pakistan Textile Mills Association (APTMA) Dr Gohar Ejaz also attended.
On the first day, APTMA Patron-in-Chief Dr Gohar Ejaz was joined by Senior Economist of the World Bank Group (Pakistan) Gonzalo J. Verala, Advocate Salman Akram Raja, Mr Aamir Fayyaz, Mr Hamid Zaman & Ali Khizar on a session on Sustainable Growth and Role of Textile Sector.
SUSTAINABLE GROWTH & ROLE OF TEXTILE SECTOR
Economy Festival 2023
APTMA, represented a decorated panel at the ECONFEST with Patron-in-Chief APTMA Dr Gohar Ejaz, Snr Economist World Bank Mr Gonzalo J. Varela, Adv Salman Akram Raja, Mr Aamir Fayyaz, Mr Hamid Zaman & Ali Khizar. pic.twitter.com/cSPbKJFnMa
— All Pakistan Textile Mills Association (@APTMAofficial) March 13, 2023
A variety of topics were covered during the session, including, Pakistan’s productivity challenges, Agricultural productivity and the challenge of climate change, Textile Industry & Social-Economic Significance, RCET: Competitive Energy Essential to Sustain & Grow Exports, etc.
At the onset, the importance of the textile industry was highlighted since it is the biggest industrial sector in the economy of Pakistan. However, due to the recent political instability, the textile sector is facing a decline in its sustainable growth. The political inconsistencies create inefficient policies which directly impact the textile industry.
During the session on, Dr Gohar Ejaz lamented that in Pakistan, the imports are exceeding the exports, which is destroying the economy.
“We have no surplus for exports. We are not competitive. We don’t have an export culture. We lack the ability to work and produce quality goods that can be marketed in the world. We lack the will to export, or the government does not let us export,” Dr Gohar EJaz said, highlighting the challenges facing Pakistan’s economy while noting that the textile industry is the solution.
Interestingly, Dr Gohar Ejaz explained that Pakistan needed a little over $6.8 billion annually to move the economy onto the right track. Annual revenue of $6.8 billion from textile exports could have easily paid off the debt of the last fourteen years.
“We could have decreased our imports by increasing our agricultural production. We could have increased our exports by $6.8 billion. We could have created an environment for foreign direct investment of $6.8 billion, or we could have curtailed our expenses in dollars by 6.8. All options were available,” Dr Gohar Ejaz said.
He then added that APTMA went to the government saying the economic issue can be resolved with the $6.8 billion but the textile industry needs government support in the form of a Regional Competitive Energy Tariff (RCETs) instead of 6% duty drawbacks on exports and local taxes which have added no value to exports.
The government had agreed and gave the textile industry an RCET of 7.5 cents which resulted in an investment of $5 billion by the textile industry as the textile exports rose from $12.3 billion to $19.3 billion in 2022. However, the RCET was withdrawn, resulting in the textile exports declining to $1.2 billion a month.
Moving on, Dr Gohar Ejaz urged that Pakistan needs to keep its exchange rate in line to balance the demand and supply of dollars which can be done by an international exchange rate. Devaluing the currency brings in imported inflation leading to high-interest rates, which is a major hurdle to the biggest borrower – the Pakistani government.
“We need to take our country’s economy seriously. The policies need to be homegrown,” Dr Gohar Ejaz said after asserting the importance of RCET for making Pakistan competitive in the international market.