The distinguished Federal Commerce Minister, Mr Ahmad Mukhtar, disclosed recently that the Government has decided to allow the liberal imports of fabrics. Justifying the decision, the worthy Minister, who is an eminent industrialist in his own right, has enumerated certain features. He has pointed towards the massive smuggling of fabrics into the country and his view is that the legal imports will curb this ever-growing menace. He has also referred to the conditionalities of the Uruguay Round under which the markets have to be opened to the foreign seller. He also brought into focus his opinion that the quality of Pakistany fabrics is not world-class and that the imports will provide the required impetus to improve the quality. He also alluded to the fact that the prices of local fabrics have increased drastically and that the manufacturers are making the proverbial hay.

There is an imperative need to zoom in into the points raised by the supremo of the Commerce Ministry. The main argument that the smuggling regime has intensified in the past few years holds true. The country has been made hostage by the true enemies of this Motherland----- the smugglers. In blatant connivance with corrupt authorities, in open disregard for all norms and procedures, and in full support of the extra-ordinary wealth and influence at their beck and call, these transgressors have made a mockery of all laws and have, in the process, wrecked the entire economy of Pakistan. Today, it is the rule of the jungle. The various SROs, rules, and regulations have been thrown to the high winds and the criminals are having open season. The only sufferers are the genuine industrialists and businessmen who are paying heavy taxes, duties, and rates inspite of the declining economic conditions in the market.

The Government has totally failed in its approach towards curbing the rampant increase in smuggling. The CBR higher authorities bide away their precious time conjuring up new ways to fleece the business community. Any and all pleas to stop this menace falls on deaf ears. The high priests sitting in the cozy atmosphere of the Secretariats are playing the usual game of watching the politicians acting in their own production of Ten Little Indians, laughing their guts away at the shenanigans of the pygmy politicos. They don’t give a dime to the sufferings of the industrial community. The smuggling barons have their tentacles well entrenched into the citadels of the bureaucracy and the Parliament to fret about the brouhaha of businessmen clamoring for a re-thinking into the infamous Afghan Transit Trade scheme. The flagrant misuse of the Dry Ports facilities is well enshrined in the public knowledge.

Minister Mukhtar has come up with this notion that the legal imports will deter the unscrupulous smuggler. This is like sending a robber to catch the thief. Does he really think that this will keep the smugglers away ? Does he really believe that the Customs personnel and the Border guards will forego their share of the pie by deflecting the smugglers to become legit ? No way Jose ! This hackneyed proposal will do no wonders. It will just increase the influx of imported fabrics into the country.

The venerable Minister also referred to the Uruguay Round scenario. The nation can cross the bridge when it comes to it. At present nearly all countries are following their own rules and policies. Japan has consistently kept alien goods away thru its labyrinthine procedures. USA has cried itself hoarse trying to force the Tokyo government to ease up on the entry of imports.

Pakistan is producing and exporting a huge meterage of fabrics. Millions of jobs are at stake. The liberalization of the import regime with specific reference to fabrics will be a calamity for the indigenous weaving industry. As it is, the weavers are in a pathetically fluid position due to the internal and external pressures on their industry. A free flow of fabric imports will be the catalyst that will result in the ruination of this sector very rapidly. This will be a sure shot recipe for disaster.

The MNA from Gujrat has mentioned the inferiority of the Pakistany produced fabric. There is a little amount of truth in it and is generally the result of the "cutting corners" which is the inherent trait of many a local producer. Instead of increasing prices when the need arises, the Pakistany businessman sometimes dilutes the quality instead of correspondingly increasing the value of his sales price. This is one of the vagaries of life. However, this is not an universal application. The vast majority of manufacturers are conscientious and are diligently endeavoring to produce high grade fabrics. Today the Wool fabrics or top-grade suitings are worth their weight in quality marksmanship. Pakistan’s dyers and printers are religiously improving their products. The polyester printed fabrics are being exported in millions of meters and that to into the markets of Paris, London and Dubai. A bee-line is formed to demand Pakistany fabrics. The domestic-market based apparel manufacturers conjure up world class garments produced from local fabrics. The apparel exporters rely heavily upon the Pakistany fabrics and are in a position to secure top dollar for their output.

The argument, then, that the Pakistany fabric is not upto the mark is fallacious. If one enters the domestic Baras, one can come up to the shoddy, rejected, and low value imported fabrics available aplenty. This is what will happen when the fabrics are allowed liberally into the local market. It will be a rare occasion when one would see premium value foreign fabrics in Pakistan. The local populace, still suffering from the foreign-is-best colonial mentality will fall prey to the dealers selling low-grade imported fabrics. It will do no wonders for those apparel manufacturers who may use these fabrics. A case in point is the disaster to the trade with the buyers from the Central Asian Republics. These buyers who until recently swarmed the local markets have now all gone to Dubai. The domestic store-keepers, in order to make a quick buck, and in keeping with their myopic outlook, started under-cutting the genuine manufacturers by resorting to the purchase of defective Taiwanese fabrics from Dubai and sold a lot of trousers and suits made from these fabrics to the CAS buyers. The end result was the complete cessation of buyers inflow resulting in a tremendous loss of dollars and prestige. This will be the game-plan again if third-rate and junky fabrics are allowed into the country.

The Minister also talked about the high price of local fabrics. The Minister should have first checked with the market functionaries or the manufacturers to ascertain the reasons why the prices are not low (by the Minister’s yardstick). The suitings and the polyester fabrics prices are somewhat high. This is primarily due to the high cost of inputs. Take for example, the cost of polyester yarn. The local filament producers have artificially kept prices high because of the oligopoly prevalent in their field. They have been getting windfalls after windfalls. Even a new entrant is off to a good start after a year in production. Doubling and trebling capacity is a common feature. Everyone is setting power plants, auxiliary companies, and other ventures. The advantages accruing to the filament yarn manufacturers are enormous. They have maneuvered to keep duty on imported yarn higher even though these yarns are not yet produced in Pakistan. The labor cost, the loss in production due to load-shedding and water scarcity, the high utilities rates, the excessive customs duty on dyes and chemicals, the non-availability of finance and the ever-increasing sales tax amounts have also geared up to increase the value of the fabric.

The local manufacturers are surviving in a rough-and-tough environment. There is heavy competition, both internally and with international forces. There is ample need to rationalize the duty structure of imported inputs. There is a growing need to cut back on sales tax so that the processing industry can prosper. There is the increasing need to streamline the utilities performances. And, there is the imperative need to stop the misuse of the Afghan Transit Trade and the Dry Port facilities. No other measure is required to make the local weavers and processors to come up with top-grade and pocket-book friendly fabrics. It is as simple as that !

The Honorable Commerce Minister is sincerely advised to refrain from taking any steps that will be detrimental to the progress of Pakistan’s textile industry. A concerted dialog session will bring about the solutions explained above. Import of fabrics without a level playing field for the domestic manufacturers will be the sounding of the death-knell. All that will be left is a Requiem for the dead textile industry. The only people to join the Minister at the Requiem will be the immoral smugglers and their felonious cohorts in the Customs and in the Border authorities, and of course those politicians who are in the pay of these lawbreakers. No one else !