How can Garment Industry help Pakistan in Achieving Export-Led Economic Growth?

Ten years ago, total Pakistani exports per annum were over US$17 Billion whereas total Bangladeshi exports were just around US$13 Billion.  Currently, total annual Bangladeshi exports have crossed US$ 40 Billion whereas annual Pakistani exports stand below US$ 22 Billion. Out of these total export figures, Bangladeshi textile and clothing exports jumped from US$ 10.66 Billion in 2007 to US$36.5 Billion in 2017, whereas Pakistani textile and clothing exports increased from US$ 10.74 Billion in 2007 to just US$13 Billion in 2017. Textile and clothing products account for more than 90% of the total US$40 Billion Bangladeshi exports. Hence, it can be concluded beyond any shred of doubt that textile and clothing products played a pivotal role in achieving export-led economic growth for Bangladesh over the last 10 years. It is inconceivable why the Pakistani government is looking hither and thither when the textile and clothing industry offers a huge potential for helping Pakistan in achieving the export-led economic growth.

Despite being the 4th largest cotton producing country in the world, Pakistan is the 14th largest textile exporter whereas Bangladesh has become the 3rdlargest exporter of textile and clothing in the world, followed by China and India. The major factor that helped Bangladeshi textile and clothing industry in outperforming Pakistan has been its prime focus on exporting high-value-added garment products instead of exporting raw yarn, fabrics or low-value-added home textiles. Out of the total US$36.5 Billion textile and clothing exports by Bangladesh, more than worth US$34 Billion comprise high-value-added garments. Pakistani high-value-added garment exports are below US$5 Billion. Bangladesh has more than 4000 garment factories in operation whereas in Pakistan, the number is below 1000. Garment sector offers not only a huge potential for helping in achieving export-led economic growth but also a huge potential for much-needed employment generation in the country.

Global textile and clothing exports currently stand at around US$790 Billion, out of which garments and accessories account for US$ 452 Billion. Bangladesh has very wisely focused on this huge export market segment of garments and accessories whereas Pakistan has been focusing on much smaller US$57 Billion global raw cotton yarn and fabric export market segment, and US$ 63.5 Billion global home-textiles export market segment where the competition is cut-throat and the profit margins are extremely small. Pakistan, very unwisely, exports raw cotton yarn and fabric to China and Bangladesh, instead of converting these precious raw materials to high-value-added garments for export. On the other hand, Bangladesh imports a huge quantity of cotton yarn and fabric and then exports it worldwide after converting these raw materials into high-value-added garments. Pakistani government needs to put in place such policies which encourage the establishment of new garment factories in the country and urge export of high-value-added garments instead of raw cotton yarn and fabrics. The real wealth of nations is not created in encouraging investment in building housing colonies on agricultural lands but in adding value to God-given natural resources such as cotton, in the case of textiles. In my humble opinion, we can fairly quickly stimulate export-led economic growth in Pakistan by attracting investment from real estate towards building new garment factories and replacing export of raw cotton yarn, fabrics and low-value-added home textiles with that of high-value-added garments.

Dr. Tanveer Hussain

Dr. Tanveer Hussain is a Professor of Textile Engineering at National Textile University Pakistan.

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