PAKISTAN: Budget 07-08 disappointing for textile sector

LAHORE: The budget presented by the government for the fiscal 2007-2008 is highly disappointing.

The government has taken credit for seven per cent rise in the GDP and $14 billion as foreign exchange reserve.

A recent study on development indicators released by the World Bank on April 15, shows that from 1999 to 2005 the average GDP per capita growth in Pakistan on the basis of purchasing power parity has been 4.62 per cent. During the same period the average per capita increase in other developing countries was: Philippines 5.17 per cent, Indonesia 5.77 per cent, Turkey 5.79 per cent and India 7.32 per cent.

The government's claim about reduction in poverty is similarly hardly tenable. In fact this would mean almost 33 per cent of the people living under the poverty line to cross the poverty line upwards. In aggregate terms this would mean that out of 52 million people living under the poverty line some 13 million have improved their status and got out of the grip of poverty.

Economic growth can be sustained only if the Commodity Sector of the economy grows and becomes the main engine of growth. The growth the country is witnessing at the moment is based more on the services sector and exogenous factors like foreign remittances and the US aid for Pakistan's mercenary role in its 'war on terror'. There has been no significant and sustained quantitative or qualitative improvement in the agricultural sector of economy.

Basically, the agricultural sector has remained a neglected sector where the cost of production is escalating resulting in food inflation. The industrial sector is also lagging behind, particularly the textile industry, which accounts for almost sixty per cent of our exports. It is because of this crisis in textile sector that exports have seriously lagged behind.

Raw cotton is now being exported , while value-added textile exports are on the decline. Already 116 textile mills have been closed, half a million spindles gone out of motion and several million people rendered jobless. So strong in rhetoric, the budget is silent on the problems of the country's most crucial commodity production sector.


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Added: June 17, 2007 Source: Agencies
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