JICA critical of incentives to textile industry

Pakistan Government's support to the textile industry is relatively weak in comparison with the incentives provided by the Governments of India, Bangladesh and Sri Lanka to their textile industries. This was observed in a report of Japan International Corporation Agency (JICA).

The report pointed out that the multi fiber agreement (MFA) was expired in 2005 and added with the abolition of export quota system, export of Pakistan's intermediate products like yarn and fabrics had registered an increase under the new business environment.

However, the export of final products, which could not achieve expected benefits from the fruits of abolition of the quota system, while the exports of final products from India, Bangladesh and Sri Lanka had registered tremendous growth rate, said the report.

The reports said lack of skilled workers was one of many reasons due to which Pakistan's high valued final products were not competitive in the international market.

In spinning industry, which manufactured intermediate products of cotton yarn, the report said a small number of engineers or technicians were needed for the operation and maintenance of machinery.

The report pointed out that in the garment industry, which manufactured final products for consumers, the workers should have a certain level of skill and experience. But the majority of the labour force, having educational background of even less than the fifth grade standard, was engaged in this industry.

The report suggested that to cope with the intense competition with the Chinese and other manufactures of final products, Pakistani manufactures should develop their own designs based on their indigenous cultural background. The export of made-ups, such as bedware, was increasing, but the Pakistan manufacturers could not meet the requirement of the foreign buyers, who usually supplied their own designs, believing that only a few manufactures had the capability to develop their own designs.

The report stressed the need for extending the value chain of the production toward the forward direction - designing, research and development (R&D) - as well as the backward direction - distribution and marketing - so as to add more value to the final products.