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Buisness Recorder

Published Date: Dec 21, 2016

‘Competitiveness of apparel sector hit by high cost of doing business’

To boost the exports in apparel sector, Pakistan needed to find its ‘pockets of excellence’ with identification of segments it possessed best potential to perform. Building relations and winning the trust of buyers was equally important. To achieve this, buyers must be assured that the country has strong mechanisms in place to address issues that may hamper the sustained supply of items that are being imported.
Ravindra A Yatawara, Senior economist in the growth and competitiveness program at the World Bank Institute said this while speaking at a seminar held at Sustainable Development Policy Institute (SDPI) here on Tuesday.
The discussants at the seminar ‘Policies to Boost Competitiveness: The Case of Apparel Sector’, highlighted the required investments (both public and private) and policies to boost competitiveness in this segment of economy. Ravindra A. Yatawara, during his lead presentation cited the case studies of Bangladesh, Sri Lanka and Turkey and illustrated the usefulness of such investments for firms and nations trying to create jobs and capture higher margins along the rapidly evolving global apparel value chain.
He said that the strategic segment in a sector was important to identify as one of the fundamental ways of doing business. Earlier, Dr Vaqar Ahmed, Deputy Executive Director SDPI, explained that the competitiveness of the apparel sector has been hurt due to high cost of doing business in Pakistan which includes high import tariffs, energy and security costs.
Pakistan’s limited participation in global value chains could be attributed to weak trade facilitation, lack of co-ordination between Ministry of Commerce, the Federal Board of Revenue and Provincial revenue authorities. The small and medium exporters in apparel sector are unable to access timely credit facilities, Dr Vaqar said and added that the current exchange rate regime also strengthens anti-export bias, already seen in the tariff structure and de facto industrial policies. He urged that an independent evaluation should now be conducted regarding why Pakistan’s utilisation of Generalised Scheme of Preferences (GSP) and other trade agreements has not been optimal.
Umer Khalid, Industrial Policy Advisor, Ministry of Finance also expressed his views on the occasion and said that government of Pakistan was offering range of facilitation and support to textile sector including the apparel sector.
He said zero rated import duty on items used in export related manufacturing and financing facilities were few of the steps to boost the competitiveness of the sector in international markets. However, he said, the apparel sector also needed to explore new avenues and approaches to boost its exports. -PR