Leather sector unlikely to achieve $1 billion export target: PLGMEA

The Pakistan Leather Garments Manufacturer and Exporter's Association (PLGMEA) Vice Chairman Mudassar Masood while showing pessimism said the leather sector may not achieve the export target of $1 billion, set for the current financial year, particularly when the government is not serious to resolve issues faced by the industry.
While talking to Business Recorder, PLGMEA Vice Chairman Mudassar Masood said the leather industry is passing through a very difficult time, as the cost of business has been showing rapid increase. The policymakers did not take the stakeholders into confidence, while formulating economic policies. The entrepreneurs can play their role in enhancing exports to get rid of foreign aids and loans but it is only possible when the government will join hands with the business community and resolve their problems, he said.
He was of the view that the government would have to evolve national marketing strategy in collaboration with the private sector so that the Pakistani products, which were best of the best in the world, could be marketed properly. There is a dire need to explore new markets as the economic turndown and the resultant recession have curtailed the buying power of the consumers in the developed world, he added.
The PLGMEA Vice Chairman said that the Lahore Chamber of Commerce and Industry was striving to ensure consistency in economic relations with the all countries of the world but to achieve the goal, the private sector for being the engine of the growth would have to come forward. He also stressed the need for diversification of markets and products so that Pakistani products could reach in the maximum parts of the world. He also called for effective measures, as there was no dearth of resources in Pakistan and it could touch the zenith in real term of the world if a little attention was given towards this particular area.
Mudassar Masood termed the federal budget 2010-11, as disappointing for the both trade and industry. He said the Federal Finance Minister has failed to come up with any solid plan for the economic revival of the country. The increase in federal excise duty on gas would further increase the production cost which is a big blow to the industrial sector, he added. End to zero rated regime will also hit the export-oriented sector hard, while no relief has been announced for the agriculture sector, which was badly suffering due to power and water shortages, he maintained.
He said that it would dent the food security of the country. Instead of initiating reforms for the improvement of FBR working, the government has further tightened noose around trade and industry, thus it is imperative that the government should come up with a relief package for the economic revival of the country. He also made it clear that the industrial sector would not accept value added tax in any shape. The business community was expecting allocation of special funds for the construction of water reservoirs but unfortunately no such announcement has been made despite repeated appeals by the masses, he added.
Mudassar Masood also urged the government to announce a package of incentives for the leather industry, which is facing multiple internal and external challenges and said that there was no denying of the fact that the influx of Chinese semi finished/finished goods has pushed a large number of vendors to the wall and there revival sans government co-operation would be impossible. Thus, it was absolutely necessary for the government to facilitate the small businesses. Pakistan must learn some lessons from the developed world who gave due attention towards their cottage industry. The cost of business was touching the sky, therefore, it was imperative for the government to extend help to the export-oriented leather industry.
He also took a strong exception of the Federal Board of Revenue for delay in the release of Sales Tax Refund and said that it has become a routine matter of them to use delaying tactics. He urged them to ensure the refund at the earliest as it was hitting hard the already cash-strapped business community. He said the undue delay in the release of sales tax refund and non-availability of rebate for the leather industry was hampering the business activities particularly the export-oriented sector was in dire straits.
The Sales Tax Refund was a routine practice but they were unable to understand the substantial delay of over nine months in the release of Sales Tax Refund particularly when the export-based industry is passing through crucial period of its recent history. He claimed that since the month of October 2009, not a single refund was made by the Federal Board of Revenue and now it has become very difficult for the industrial units to run their day-to-day affairs, as the financial cost of business has already gone very high mainly because of unprecedented increase in the prices of petroleum products.
Pakistan can be stronger and attractive business destination in real economic terms if the government and policymakers help enhance cooperation with the business community to improve trade in the international market. Sweden is presently doing 80 percent of its trade with regional countries in the European Union, thus Pakistan should also adopt the same methodology because it has a marvellous potential in all the sectors, he maintained.
Mudassar Masood further said that Pakistan needed to identify more tradable products to enhance mutual trade. Pakistan is known around the globe for its textile, leather products, sports goods, surgical instruments, fresh fruits and vegetables, rice carpets, leather made-ups, fish and fish preparations, handicrafts, artificial jewellery, fancy furniture, footwear, hosiery garments and so many other consumable items which still needs to be properly introduced in European markets.