Bangladesh Capturing Pakistan’s Export Share: PRGMEA Seeks increased Government Support
Shaikh Mohammad Shafiq, central chairman, Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) in a statement said that at present total export of Bangladesh is 33 billion USD out of which textiles is 27.5 billion USD which includes 26.5 billion USD of Garments only. We feel our share has been taken by Bangladesh. We need to fight for it and bring it to our advantage. Their exports are now increasing at 3.5 billion USD / Year and expected to hit 50 billion USD / Year by 2020, and whatever they have been giving in their budget estimate in last three years is coming true.
Pakistan ranks 138 out of 189 on ease of doing business, while last year it was 136. The cost of making garment in Pakistan is almost double ie, US $2.7 in Pakistan and US $1.5 in Bangladesh. The 60% cost component of wages has a vital impact which is 2 times in Pakistan, the other costs that includes energy and financials also burdened due to high tariff.
Shafiq, continued to cite Government must realize that time has gone when raw material used in textiles (yarn, fabric etc) could be exported. This trend is not going to continue and it is the reason Pakistan is facing serious downfall. Countries have to use their raw material and export only possible in the form of finished products ie Garments. We must believe in concept that countries have to be completely vertically integrated to use their raw materials in completely finished product.
If we see the exposure of these economies towards value added sector, cost is one of the key factors that Pakistan’s garment export is only 10% of BD woven garment sector, which shows keen interest of BD Govt. and other low cost wages countries to boost up this sector and to offer different incentives and schemes to further enhance and growth of this industry.
Labor is one of major cost component of the industry and where BD goes in favor of employers where minimum wage stands at around 68 USD as compared to Pakistan which is 125 USD and rising. Additionally the lower utilities cost further benefits the manufacturer.
It is now the need of the hour to develop a coherent plan by the government that allow some sort of exemption/concession to the garment sector with positive frame of mind as the growth rate of this industry is declining continuously. He concluded, in order to enhance the export we need the following immediate measures, which we have already submitted to the Government. Zero-rated regime announced by the Prime Minister right now. Release of stuck up refund payments against Sales Tax, duty drawback and drawback on local taxes and levies (DLTL). “No payment no refund” system. Tariff of electricity, gas and water for export sectors should be brought down. Incentive on export as per our competitors