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Govt not prepare
cottage industry to meet WTO standards
By Nadeem
Shah
MULTAN: The small and medium enterprises and cottage industry
has complained that the government policies have been
reflecting lesser interests to introduce WTO standards after
unilaterally singing the regimes’ conditions and bounding
the SMEs to follow the footsteps, it is learnt.
 The small and medium enterprises sector was of the view that
WTO is the imposition of United States and Europe’s
corporate agenda on the developing world and Pakistan signed
the agreement by abolishing subsidy compared to India who
had signed under his own conditions.
WTO laws are threatening Pakistan’s cottage industry and
domestic businessmen were expecting irreversible mess in
result of complete promulgation of WTO agreements with out
deeply studying the 600 pages document, they said.
Traders involve with fans industry has been facing major
threat from big manufacturers include Germany, China, Japan,
USA and Taiwan exporting nearly 70% of the total
international market of fans industry while the industry in
Pakistan has been declining.
Fans have been manufactured in Pakistan since its inception
in 1947 mainly clustering in the four major cities namely,
Gujrat, Gujranwala, Lahore and Karachi with product line
includes ceiling, pedestal, table bracket, exhaust, and
louver fans.
Pakistan earned a foreign exchange of US$ 1.66 million in
1999, which can be divided into two major categories
industrial & domestic fans.
The fans industry grew by 8% to 5% in 1996-1997 respectively
but declined by an average of 4% in last few years. For the
year 2000-2001, which shows that there is decrease in
exports from $0.57 million in 1999 to nearly $0.104 million
in 2000-01- by more than 81% in last two years.
Some of the leading importers from Pakistan include
Bangladesh, which accounts for 47.8% of Pakistan’s domestic
fans exports, Saudi Arabia, has 18.7% share followed by UAE,
with 17.3% share.
The domestic fan category shares 29% of total fan exports.
This share has decreased from 33% over the last five years
due to an average decline of 6% in domestic fans
international market in last three years.
The home and textile association member Mian Mugis was of
the view that developing countries commerce sector is not
satisfied with the results of Uruguay Round and it is not
easy to agree on Doha development agenda, especially
Pakistani trade felt that his government went too far in
liberalizing their domestic market.
The access to foreign markets at the same time in
traditional export items include agriculture products,
textile and clothing not to mention labor remained subject
to serious restrictions, he concluded.
The experts in SME sector observed there is the only option
for SMEs to upgrade their outdated technologies otherwise
they will no more on the ground or to compete with the
onslaught of foreign goods that is finding their way into
local markets.
The small industrial sector in Pakistan currently employs 80
percent of the total workforce and contributes 40 percent in
the country's Gross Domestic Product (GDP).
The selected SME sector was found still unaware on WTO
standards include cutlery, apparel, bed-wear & bed-linen,
bicycles, blankets, canvas & canvas products, ceramics,
cotton & ginning, curtain & furnishing, dairy, electric
fans, finished leather, fisheries sector, footwear, ceramics
& made-up, gems & jewelry, leather garments, leather gloves,
leather goods, leather industry, marble & granite, spinning,
surgical, textile weaving, towels & terry products, table
linen and wooden furniture.
However, the large textile sector and big industries were
found confident in facing the WTO challenges compared to
sugarcane industry, domestically manufactured auto parts
sectors and hand made industry complained for costly power
tariff and sui gas utilities and feared the situation would
dent in their survival.
Pakistan Railways Advisory Board member and a big textile
miller Khawaja Jalaluddin Roomi, however said there should
be no perplexity or anxiety on WTO regime because the
self-knowledge based sector is fully prepared to face the
challenge.
“We must have equipped our institutions on self-help basis
instead of external factors helped us in developing”, he
said. There would be no disastrous situation following the
removal of trade barriers and implementation upon WTO
regime, he said.
The days of state-owned Development Finance Institutions
(DFIs), directed credit and mandatory targets for priority
sectors, subsidized interest rates, public sector owned
specialized financial institutions are over, he observed.
The channeling of credit to the poor and middle-income
classes has to be achieved through market-based financial
system, he said. The government has reduced corporate tax
rates on banks from an exorbitantly high 58pc to 42pc and
aims to bring them down further to 35pc in the next two
years.
The city district nazim Mian Faisal Mukhtar and one the
close aid to Punjab Chief Minister Chaudhry Pervez Elahi was
of the view that Federal Commerce Ministry has extensively
been working on WTO.
The government introduces quality standards of ISO to combat
with the future challenges. As the chairman of dominant
industrial chain of Fatima Group, he was confident that
textile sector in Pakistan can survive WTO challenges but
feared about the survival of sugar and cottage industry in
the country.
“Pakistani textile can easily compete WTO regime
conditions”, he said. However, strategy for combating with
Chinese industry should be chalked out where cheap
electricity, network of dams and continuous increase in GDP
rate is the edge for Chinese industry compared to Pakistan,
which is facing costly power tariff and decrease in GDP
rate.
Pakistan Tanners Association former chairman Khawaja
Muhammad Yousaf said that he had sent numbers of letters to
the Federal Commerce Ministry urging for mass awareness on
WTO but failed in receiving positive response.
Since the WTO regime is fast approaching and its impact
would be far reaching specially for export-oriented
industries including leather sector have been seeking needs
for organizing seminars/workshops on negative, positive
aspects about WTO conditional ties with out loss of time.
Khawaja Yousaf also suggested the Ministry should provide
salient features and necessary guidance in shape of booklets
to the concerned trade bodies in case holding of seminars
was not possible. “Still I have been waiting for positive
response in this regard for last 8 months”, he said.
The developed countries have been slow in eliminating
restrictions in textile and clothing while the developing
countries including Pakistan had difficulties in
implementing obligations due to lack of substantive dialogue
between traders and government during Uruguay Round, he
commented.
The Pakistani government remained aloof to hold meaningful
dialogue with the business community or giving knowledge
based awareness on WTO and she accepted some obligations
that are difficult to meet in the specified time frames, he
added.
Multan Chamber of Commerce & Industry committee on
engineering auto-mobile chairman Mian Iqbal Hassan said that
the government did not play her due role on WTO awareness
and just gave lip service on the issue.
The China has been seeking for further eight years’ grace
period with giant economy, India also requested for two
years despite playing an active role on WTO preparations
while Pakistan was just waiting for Indian grace period that
would provide a logic to him in getting further extension.
Very small-scale seminars, workshops on WTO were held at
government level.
He said the domestic auto parts industry has been facing
serious crises of smuggling from India and under invoicing
from China but the lifting of trade barriers would make
Pakistan just consumer society, he feared. Hassan revealed
that presently Pakistani engineering auto mobile sector had
imported Copper at $ 3200 dollar per ton which was equal to
Rs 185-Rs 186 per kilogram few years back but Chinese
finishing copper products were available in Pakistani market
between Rs 150 or Rs 160.
The auto mobile sector decided to import standard steal from
China which was available at Ra 70 per kilogram at that time
compared to Pakistani sub-standard steal available at Rs 48
per kilogram. “One bag of cement is being sold between Rs
220 to Rs 225 in Pakistan but it can be imported from Greece
at Rs 80 per bag”, he said.
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Pakissan.com;
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