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Challenges cloud economic outlook View on Pakistan
Recent warnings over the deteriorating outlook for Pakistan's textile sector, highlight a grave outcome of the country's energy crises.
- By Farhan Bokhari , Special to Gulf News
- Published: 23:42 January 13, 2009
Recent warnings over the deteriorating outlook for Pakistan's textile sector, highlight a grave outcome of the country's energy crises.
The consequence of this trend is more than likely to exacerbate poverty and cause harm to a sector which is the second largest provider of employment outside agriculture.
Other factors that have come to harm the outlook for textiles include fast rising interest rates and the high cost of cotton, which is the main raw material for this sector. In recent months, textile producers have complained bitterly over industrial units shutting down because of fast accumulating losses.
What doesn't help the Pakistani textile sector is the global economic slowdown which has already affected business prospects for exporting countries.
For Pakistan, a crash in its textile sector marks a major economic setback. Textile production represents just below half of the country's total output from its manufacturing sector. Nearly a half of Pakistan's industrial work force is employed in textiles.
A slowdown in textiles is also harmful for the government's finances as this is a trend which is bound to hit official tax collections. Going forward, the plight of Pakistan's textile sector should be a lesson for the testing times faced by the country as it adjusts to a difficult domestic and external business environment.
There are at least two inter-related challenges which emerge in this difficult environment.
First, it is important to recognise that the Pakistani government must work aggressively on initiatives that help those forced into poverty. Human poverty, especially of abject proportions, is destabilising for any country, notably a state like Pakistan which is caught in the midst of growing insecurity and political turbulence.
Second, it is also vital to appreciate the difficult challenge for Pakistan being a state which is caught in the midst of a long-awaited but still troubled transition from a more authoritarian regime to a relatively democratic one.
While the office of the president and the prime minister is under the command of the same political party, the ruling Pakistan People's Party (PPP), this structure in itself is far from satisfactory. Pakistan's outlook continues to be undermined in ways not seen before, mainly because its rulers are still struggling to adapt themselves to coming up to popular expectations.
There are no easy ways to deal with the economic challenges. And yet, a credible beginning to deal with such challenges will come only when Pakistan successfully tackles the political divisions. A change for the better must also be accompanied by a major forward movement to tackle the policy challenges and the overall lethargy which hinders progress.
Pakistani officials can also draw much inspiration from the country's own experiences of a robust economic recovery not too long ago when it emerged as a key player among the world's emerging economies.
It is possible to argue convincingly that without the political turmoil in the past 18 months, Pakistan could have survived the global economic slowdown with fewer consequences.
For the sake of the Pakistani economy, new initiatives such as evolving an across the board political consensus to back economic policies, may well be a far more advisable way to go forward than overseeing continued political uncertainty.
- The writer is a journalist based in Pakistan.
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