Factory employee Lubna Babar was made redundant at first of the yr, a sufferer of a disaster within the Pakistan textile business that has seen it lose floor to extra nimble Asian rivals.
“When you lose your job, your life comes to a close,” the 43-year-old from Lahore advised Agence France-Presse (AFP).
“We’ve been working in factories for years… the day you get sacked, the story ends there.”
Pakistan’s industrial manufacturing sector – like elsewhere on this planet – has suffered from the slowdown in international consumption and the rise in power prices following the outbreak of warfare in Ukraine.
But the difficulties of the textile sector, which accounts for 60% of Pakistan’s exports, are compounded by the vital state of the economic system and months of political chaos.
In Pakistan, the business was buoyed on the tail finish of the coronavirus pandemic, when it was freed of restrictions sooner than regional rivals India and Bangladesh and benefited from authorities monetary assist, together with slashed power charges.
In 2022-2023, nonetheless, textile exports fell by 15% to $16.5 billion.
“Two years ago, we were on a very high growth trajectory… we were confident that our exports this year would go to $25 billion,” stated Hamid Zaman, managing director of Sarena Textile Industries.
“Unfortunately, when you have political instability and things are not clear, and the policies of the government are reversed, this whole thing has gone into a tailspin,” he advised AFP.
The political chaos began in April final yr when Imran Khan was dismissed as prime minister by a vote of no-confidence.
His makes an attempt to parlay widespread public assist right into a motion to power an early election noticed him arrested in May, resulting in violence that solely ended with an enormous crackdown on his social gathering and its supporters.
He was convicted of graft on Saturday and sentenced to 3 years in jail.
Factories shutting down
The textile and clothes sector employs round 40% of the nation’s 20 million-strong industrial workforce.
The principal export markets are the U.S., EU, the U.Ok., Türkiye, and the UAE, supplying cotton materials, knitwear, mattress linen, towels, and ready-made clothes to international manufacturers akin to Zara, H&M, Adidas, John Lewis, Target and Macy’s.
But many factories have closed in current months – not less than briefly – or are now not working at full capability.
“Perhaps 25 to 30% of all textile factories have closed. It is estimated that perhaps 700,000 jobs have been lost in the last year or year and a half,” stated Zaman.
Babar felt this keenly, having appeared for work at different factories – however they have been additionally shedding workers.
“They said they were no longer receiving orders from abroad,” she stated.
After devastating floods in the summertime of 2022, cotton manufacturing in Pakistan fell to an all-time low.
The textile business was unable to compensate by shopping for from overseas due to a freeze on imports imposed by the federal government to protect its foreign exchange reserves.
Thousands of containers full of uncooked supplies and equipment important for the nation’s industries have been held up for months within the southern port of Karachi.
Textile firms additionally noticed the price of capital rise considerably, contending with rates of interest of over 20% because the central financial institution sought to curb record-breaking inflation.
‘Not an answer’
Pakistan lastly managed to consolidate its international alternate reserves with the approval in mid-July of a $3 billion mortgage from the International Monetary Fund (IMF) and extra help from China, Saudi Arabia and the United Arab Emirates.
“But that’s not a solution, it’s just getting deeper and deeper into debt,” stated Kamran Arshad, managing director of Ghazi Fabrics International.
“The only way forward is enhancing Pakistan’s exports and creating an environment that is investor-friendly that would incentivize industrial production and activity,” he added.
One of the situations of the IMF bailout was an finish to subsidies on power, resulting in a pointy rise in the price of electrical energy, which impacts the competitiveness of textile firms.
“Our biggest challenge going forward is having energy prices that are substantially higher than those of India, Bangladesh, Sri Lanka, Vietnam and China,” stated Arshad.
“We’re not asking for subsidies. Realistically we are asking for regionally competitive energy prices.”
In the face of those challenges, the nation’s textile producers have misplaced clients globally.
“Pakistan’s overall market share in the textile and garment industry was nearly 2.25% about two years ago. Now it’s down to around 1.7%,” stated Aamir Fayyaz Sheikh, CEO of Kohinoor Mills.
Sheikh sees some hope if the political state of affairs settles following an election due earlier than the top of the yr.
“After the elections, there will be more political clarity and that will help bring more economic stability,” he stated.
But for unusual employees like Babar, there may be little gentle on the finish of the tunnel.
“Life is getting harder every day,” stated the mom of three.
“We cook once and make it last for two days. And if we don’t have any food, we make do, without complaining.”
Source: www.dailysabah.com
