Whose Fault do you think it is.Its a bit old article.But do you guys agree with the Interviewee that its Mushariif/leaders fault??
Do you know of anyone personally like anyone owning mills that
I would say that its the Globalized Competintion that is to blame.What do you guys think?
FAISALABAD, Pakistan – The irrigated plains already shimmer with cotton seedlings. The highway from Lahore pours into the city past red-brick walls of textile mills – dozens and dozens of mills, “more than a thousand,” said Mian Naeem ur-Rehman, chief executive of Insaf Textile Printing Mills and former president of the Faisalabad Chamber of Commerce.
Mr. Rehman, 54, wears a great, gray beard, a sign of his fundamentalist Muslim beliefs. But he has plenty of business enthusiasm and loves a joke (“The people on the beaches in Denmark must be very poor, for they have few clothes,” he says with a wink).
His tone turns morose when he talks of Pakistani politics and Pakistani textiles.
After Sept. 11, 2001, U.S. Trade Representative Robert Zoellick, now president of the World Bank, saw an opportunity to fight terrorism with trade by helping Pakistan get more of its textiles into world markets.
With 3.5 million workers, or 60 percent of Pakistan’s manufacturing workforce, textiles are Pakistan’s great jobs engine. And jobs are considered an antidote to the sort of alienation that can lead to radical politics.
Mr. Zoellick spent years trying to get the U.S. Congress to relax trade restraints on Pakistani textiles. Resistance from the textile lobby led to only grudging, modest relief.
Then a global textile agreement through the World Trade Organization ended virtually all textile quotas in 2005. But Pakistan still finds itself unable to compete. Much of the business has fallen to China, India and Bangladesh.
The mills in Faisalabad are sluggish. Cotton is being imported from India. Unlabeled fabrics are being imported from China by Faisalabad mills that do no more than sew “Made in Pakistan” labels on them before shipping them abroad, Mr. Rehman said.
“A thousand mills – and 600 are closed or for sale,” he said. The mills have closed in the last two or three years, or in the time since trade restraints on textiles have largely vanished around the world. “People are lowering standards, buying cheaper dyes, trying to compete with China.”
When producers in another part of the world can make bed sheets or garments for a lower price, with better quality or better access to markets, international trade will shift there from the less productive place.
It happened long ago in Dallas, which once was the global heart of the cotton business and a robust textile manufacturing center. The garment factories that remained in North Texas into the 1990s are largely gone, thanks first to free trade with Mexico and then to the 2005 demise of the global quota system over textiles trade.
Pakistan should have won more business in these shifts. Its textile manufacturers have comparable advantages with cheap labor, vast cotton fields, and road and rail connections from Faisalabad to the Karachi seaport.
Asked why these were not enough, Mr. Rehman blames President Pervez Musharraf’s government.
“We pay sales tax, income tax, labor tax, hundreds of taxes,” he said. “We told President Musharraf, ‘Reduce taxes, and we will compete with the same prices with China.’… Mr. Musharraf said something would be done, but nothing happened.”
Mr. Rehman believes Mr. Musharraf, who recently retired as head of the Pakistani Army, did not act because most tax revenue goes to the military.
He hopes a new civilian government – with Mr. Musharraf pushed aside as a caretaker president – will bring relief to the textile industry. But no one party won enough seats to form a government on its own, and Pakistani coalition governments are notoriously unstable and short-lived.
Meanwhile, Mr. Rehman is losing money at his Faisalabad mills. Profit from his other businesses – two Suzuki dealerships and some coal mines – keeps the mills open.
“I have 5,000 working, so I keep the mills running despite the loss,” he said. “Can you imagine the problems it could cause in this society if thousands more become unemployed?”
A few of the mill owners admit they’ve fallen behind on productivity enhancements and in the grooming of a more highly skilled workforce. Other textile makers blame high energy prices. But there’s also the unstable political climate punctuated by violent militants and suicide bombers – a climate that could become a downward spiral if the textile industry keeps failing.
