All Pakistan Textile Mills Association (APTMA) Chairman Rahim Nasir has warned that the large depreciation of the rupee would prove disastrous for textile exporters in the long run.
In a statement, he said that the misconception that exporters welcome rupee depreciation needs to be abandoned as a plunge in the rupee raises input costs, making the exports less competitive.
He was of the view that the dollars which are earned through exports are much more sustainable as compared to other sources, the reason being that there is no compulsion to return them. Therefore, the government should focus on generating dollars through exports instead of other sources like bonds.
He highlighted that high-interest rates are a roadblock to entrepreneurship and innovation. The formula to raise interest rates for stabilizing the economy proves effective only in highly developed economies. Instead, the government should opt for long-term policy reforms featuring lower interest rates as this step would lend confidence to investors and markets.
Nasir said that Pakistan has myopically focused on the shrinking market of short-staple fiber raw cotton while neglecting the rapidly expanding market for man-made fiber (MMF). The MMF tariff regime has prevented Pakistan from competing on the international stage, while on the other hand, some obsolete plants are enjoying duty protection, he added.
APTMA Chairman urged the government to declare an economic emergency and introduce measures for energy conservation. He further asked the government to improve the export paradigm by ensuring competitive tariffs and improved facilitation.
