AVN 64.76 No Change ▼ 0.00 (0%)
BAFL 31.49 Increased By ▲ 0.31 (0.99%)
BOP 4.79 Decreased By ▼ -0.03 (-0.62%)
CNERGY 3.85 No Change ▼ 0.00 (0%)
DFML 14.48 Increased By ▲ 0.48 (3.43%)
DGKC 41.65 No Change ▼ 0.00 (0%)
EPCL 46.81 Increased By ▲ 0.51 (1.1%)
FCCL 11.33 Decreased By ▼ -0.07 (-0.61%)
FFL 5.06 No Change ▼ 0.00 (0%)
FLYNG 5.82 Increased By ▲ 0.02 (0.34%)
GGL 10.46 Increased By ▲ 0.55 (5.55%)
HUBC 65.54 Increased By ▲ 1.34 (2.09%)
HUMNL 5.61 No Change ▼ 0.00 (0%)
KAPCO 27.73 Decreased By ▼ -0.09 (-0.32%)
KEL 2.16 Increased By ▲ 0.01 (0.47%)
LOTCHEM 24.40 Decreased By ▼ -0.10 (-0.41%)
MLCF 21.51 Decreased By ▼ -0.34 (-1.56%)
NETSOL 84.61 Increased By ▲ 0.31 (0.37%)
OGDC 87.02 Decreased By ▼ -0.09 (-0.1%)
PAEL 11.00 Increased By ▲ 0.05 (0.46%)
PIBTL 4.19 Decreased By ▼ -0.04 (-0.95%)
PPL 75.35 Decreased By ▼ -1.43 (-1.86%)
PRL 13.60 Decreased By ▼ -0.13 (-0.95%)
SILK 0.89 Decreased By ▼ -0.03 (-3.26%)
SNGP 41.27 Decreased By ▼ -0.33 (-0.79%)
TELE 5.84 Decreased By ▼ -0.11 (-1.85%)
TPLP 15.62 Increased By ▲ 0.01 (0.06%)
TRG 111.84 Increased By ▲ 0.59 (0.53%)
UNITY 13.97 Increased By ▲ 0.13 (0.94%)
WTL 1.17 Increased By ▲ 0.03 (2.63%)
BR100 4,064 Increased By 18.2 (0.45%)
BR30 14,468 Increased By 34.8 (0.24%)
KSE100 40,734 Increased By 113.6 (0.28%)
KSE30 15,230 Increased By 59.4 (0.39%)
Follow us

EDITORIAL: It seems Pakistan is not going to benefit from the great relocation of China’s labour-intensive industry, especially textile, as the world’s second-largest economy manoeuvres to exploit reduced production costs as well as remove the made-in-China label from a number of its products to win back the US market. There’s been much talk of Pakistan emerging as the principal beneficiary of this exercise ever since the then US President, Donald Trump, slapped import duties on scores of Chinese products as he launched his famous trade war that disrupted supply chains across the world long before Covid upset international trade.

Yet now it turns out that countries like Cambodia, Laos and even Ethiopia — despite higher costs of labour and small markets in terms of population than Pakistan — present far better options for Beijing than its time-tested friend that has got a little too used to taking its largesse for granted. And the main reasons, according to a report recently released by the Pakistan Business Council (PBC), are Pakistan’s higher political risk, weaker intellectual property rights, less competitive energy prices, higher logistics costs and less access to international markets through bilateral or regional trade agreements than its peers.

This is a very serious moment of reckoning for Pakistan. China has become our leading foreign investor over the last few years, but this trend has already started weakening. And in addition to the reasons cited in PBC’s report, Pakistan’s unreliable security environment and chronically low labour productivity also helped tilt China towards other countries. Beijing has long complained about terrorist attacks on its workers and the inability of the government of Pakistan to protect them. Now, it appears convinced that despite all of Islamabad’s assurances, terrorists can more or less strike at targets of their choice, especially foreign workers, at will.

It’s also very concerning that after deteriorating since forever, Pakistan’s labour productivity is now lower than Bangladesh’s, Laos’s and Cambodia’s, and far lower than the likes of Vietnam and China. It could have helped if Islamabad had been a little more farsighted about developing trade relations with other countries, like Vietnam did with countries in Asia and Europe, but since such things were never too high on any administration’s agenda, all we can do now is take a back seat as China distributes its labour-intensive industries across Asia and even Africa.

And so we’ve missed the bus to better times yet again; but only because of our own inability to improve our infrastructure, labour force, security situation and trade relations like any normal country in the 21st century. Therefore, it’s no surprise that we will continue to rely on loans and grants to stay solvent. Yet with the prospect of default now a bigger reality than at any time in our history, we will need to mend our ways in a hurry if we’re to have a fair chance of surviving what is sure to be a tumultuous transformation of the international economic order for countries like ours.

Even if we start now, it will take a long time for results to start showing. Unfortunately, though, the country’s political elite is far too busy fighting over power to give much thought to a long-term economic transformation that will require all parties to play along. That means we haven’t even started to think about the kind of long-term reforms that are going to be needed. And that pretty much sums up why Pakistan continues to lag far behind countries it was once at par with.

This latest Chinese snub, if it can be called that, is a grave reminder of how much we have lost just because we cannot get our priorities right.

Copyright Business Recorder, 2022

Comments

Comments are closed.

samir sardana Jul 23, 2022 07:37pm
Y Cambodge ? Part 1 Hun Sen is 85 years old,priming his son - a Gen in the RCAF.PRC has gifted the RCAF HQ building & several ships & munitions & some tanks & RT - free of cost.Sihanoukville is quasi owned by PRC & there is a deep draft port in it - with access to Gulf of Thaiul& .A rail-road network is being set up from the PRC border to Laos & then to Cambodia With PRC with Hun Sen - Hun Sen ignores all Western pleas,on Human Rights & Democracy.His party wins with the maximum votes in history - every time.The Opposition CNRP & its leader Sam Rainsy,are banned & exiled,in France PRC is free to buy l& & build - irrespective of labour & environ regulations.There were some labour protests in the Textile sector - which led to a govtt crackdown,& the workers fell in line.PRC is free to set up SEZs & IPP,with any fuel Hence,the flexibility of business operations in Cambodia is better than in Pakistan - & the PRC imports its own Chinese,as workers & laborers..dindooohindoo
thumb_up Recommended (0)
samir sardana Jul 23, 2022 09:36pm
Y Laos - Part 1 Laos is a BETTER BET for PRC as it is a communist nation It is rich in minerals like Potash & PRC is already dug in DEEP But most importantly,land,labour,pollution,human rights,SEZ & IPP terms ARE NOT AN ISSUE Also LAOS is RICH IN HYDROPOWER - IT IS THE BATTERY OF THE MEKONG ! PRC IS THE ONLY NATION WHICH CAN TAP THE HYDRO POWER & EVACUATE IT TO PRC AS POWER OR AS MERCHANDISE Controlling LAOS & CAMB,means that PRC can dam the Mekong flow into Laos & Cambodia,& set up the MEGA HYDRO POWER PLANTS ON THE MEKONG INSIDE CHINA Lastly,PRC affords a leverage to Cambodia in its PREAH VIHAR dispute with the THAIS - else the THAI ARMY WILL STEAM ROLL CAMBODIA ANYTIME - they want to retake Siem Reap Laos also has border disputes with VIET & CAMBODIA.With Camb - PRC can play a broker & with VIET - PRC is a MASSIVE COUNTER. Also,Laos labor is unskilled & poor - BUT LAOS ALLOWS PRC TO BRING IN THEIR STAFF,SET UP SEZs & their own walled colonies
thumb_up Recommended (0)
samir sardana Jul 23, 2022 10:12pm
Y Ethiopia ? It is the intersection of China's BRI Chinese debt in Ethiopia is 15 BILLION USD -with more than 700 INFRA PROJECTS SET UP OR GOING ON It has the same strife like Lanka - with the OLA China CANNOT LET it go the way of Lanka CHINA HAS LENT 1.5 BILLION USD TO THE GERD HYDRO- WHICH NO ONE IN THE WORLD WANTED TO LEND TO - DUE TO DISPUTES WITH SUDAN & EGYPT- & EGYPT HAD THREATENED WAR - ALL TO SCUTTLE THE GERD DAM & PLUNGE ETHIOPIA INTO CHAOS & WAR - & THUS DESTROY THE BRI OF PRC GERD POWER COST IS THE LOWEST IN THE WORLD ALL THE INFRA SET UP BY PRC IN ETHIOPIA WILL NOW GET "CATALYSED" BY THE LOW COST HYDRO POWER - & TRIGGERS THE BRI ! & CHINA IS THE ONLY NATION IN THE WORLD WHICH CAN MEDIATE IN A DISPUTE WITH EGYPT & SUDAN.THE ASWAN DAM IN EGYPT & THE DAMS IN SUDAN,CAN BE COMPLETELY DESTROYED BY GERD ! CHINA HAS 30000 OF ITS OWN IN ETHIOPIA - SO ETHIOPIA WILL NOT MIND THE TEXTILE CHAIN IN ADDIS ABABA BEING STAFFED BY CHINESE
thumb_up Recommended (0)
samir sardana Jul 23, 2022 11:59pm
"Pakistan’s labour productivity is now lower than Bangladesh’s, Laos’s and Cambodia’s, and far lower than the likes of Vietnam and China." That is NOT the complete story It is the lack of Gas and Power,which leads to low PLF,and thus,LABOUR PRODUCTIVITY,CANNOT BE MAXIMISED.If PLF is low,and fear of power cuts,shifts operations to labour intensive tech - the labor productivity will be low - due to a combo of lack of gas.power and USD, and also, lower tech and labor intensive manufacturing tech. THUS THE PAKISTANI MANUFACTURING PLANTS,HAVE TO FOCUS ON OPTIMISING PLANT OPERATIONS BASED ON POWER,GAS,USD AND WORKING CAPITAL CONSTRAINTS. OPTIMISING WITHIN CONSTRAINTS,IS AN ADMISSION OF SUB OPTIMAL POTENTIAL WHICH IS Y WHEN PAKISTANI ENTREPRENEURS SHIFT TO AFRICA OR BANGLADESH - THEIR THOUGHT PROCESS WORKS ON THE "UNCONSTRAINED APPROACH" - AND MAGIC HAPPENS. THAT IS A SIGNAL OF THE LATENT POTENTIAL OF PAKISTAN MANUFACTURING.
thumb_up Recommended (0)

Missing the bus

Dar gives go-ahead to Saylani, other charities to help raise $2bn from overseas Pakistanis

New historic low: rupee settles at 271.36 against US dollar

Country can excel at nuclear power generation: PM Shehbaz

Pakistan expects 'sincere cooperation' from Afghan interim govt to address terrorism: FO

At least 17 killed as oil tanker collides with passenger coach near Kohat tunnel

Pakistan’s textile exports significantly decline in January: APTMA

Murad Saeed announces protest against rising terrorism in KP

Local court sends Sheikh Rashid on two-day physical remand

Capital gain lifts Norwegian operator Telenor to record earnings

Foreign funding case: IHC rejects PTI’s petition against ECP ruling