How competitive is Pakistan’s textile sector

Rising cost of energy, currency appreciation and higher interest rates all draw cries from the country’s business community, particularly exporters for making their goods dearer for international buyers. But with previous little data available regarding the cost composition of these industries, it is nearly impossible to assess the impact of such changes on the competitiveness of industries.
The impact of rising energy costs has been touted repeatedly as a major competitiveness killer by the textile industry and other export-oriented sectors. However changes in other costs, such as wages have missed the media spotlight.
“Wages in Pakistan have historically been competitive when compared to India and China, but if the Government of Pakistan continues to prop up the local currency while India attempts to depreciate its currency by up to ten percent, that edge may be fleeting in times to come” according to international trade expert Dr. Aadil Nakhoda.
Nakhoda asserts that it is vital to obtain clarity and granularity regarding the cost structure of the country’s most important export-oriented industry, the textile sector so that government policies can be fine tuned to ensure its global competitiveness.
That is exactly what the Institute of Business Administration (IBA) has teamed up with the All Pakistan Textile Mills Association (APTMA) and the World Bank (WB) to do. A team of researchers at IBA is working with textile industry stakeholders to conduct a comprehensive survey of the sector to aggregate information about its inputs, costs, markets, product mix, as well as perceptions regarding trade opportunities.
“The findings of this survey will be shared with key decision makers within the industry and government to assist policy makers in creating a conducive environment for improving the textile sector’s global competitiveness, particularly in comparison to regional competitors” explained the Dean and Director of IBA, Dr. Ishrat Husain.
Former Governor SBP has appealed “to all textile associations and their members to cooperative in this study so the results are robust, comprehensive and helpful for the formulation of the textile policy”.