The price for ready lint cotton in Sindh as well as Punjab was said to have ranged between Rs 6500 and Rs 7000 per maund (37.32 Kgs), according to the quality. However, yarn and textile sector was said to be unremunerative and under extreme pressure.
Textile millers, value-added textile producers as well as textile exporters have blamed the government for not implementing measures announced much earlier by the government to boost exports. The textile sector has blamed the government in no uncertain terms for deliberately withholding large amounts of outstanding refunds to the textile sector and even raising unnecessary objections. Indeed they have charged the government for undue delay in the payment of long outstanding refunds in an attempt to sabotage the prime minister's vision of economic growth.
The textile millowners, processors and exporters have charged the government claiming that billions of rupees of textile exporters are stuck up in sales tax, income tax, custom rebate refunds and incentives announced in the textile policy since a very long time. Reports added that the Chairman of the All Pakistan Textile Mills Association (APTMA) Aamir Fayyaz has blamed the Federal Board of Revenue (FBR) for rolling back all sales tax refund payment orders (RPOs) issued to the export oriented sectors.
Press reports added that APTMA Chairman has requested Prime Minister Nawaz Sharif and Finance Minister Ishaq Dar to intervene personally to solve the liquidity crunch being faced by the textile industry which is by far the largest contributor to exports and forms a major sector of the economy of the country.
On the global economic and financial front, it was noted that the year 2017 started with high hopes of a steady growth in recovery which even mostly materialized during the first quarter in many parts of the world. However, in recent talk amongst leading economic institutions, observers and analysts, fears have arisen that the global economy could again enter the doldrums and push the prospects of any growth and restitution downstream.
The International Monetary Fund (IMF) is said to have observed that the emerging economies are moving towards a slowdown as and how the American Federal Reserve Bank continues to raise interest rates steadily. IMF has further warned that the high-pitched protectionist rhetoric amongst the leading economies of the world coupled with tightening of money supply is a credible formula to slow down the global economy.
The managing director of IMF, Christine Lagarde, observed that the advanced economies would have been about five percent higher today if they had maintained their pre-2008 rate of productivity. Contrarily, however, she pointed out to a significant deterioration in productivity over the past ten years. She also referred to the possibility of a breaking up of economic integration in the developed country which worked successfully over the past seven decades.
Emerging political problems pertaining to populism and movements to the right in several European countries coupled with rising protectionism is again impinging on global growth. The IMF has also warned that keeping low interest rates in major economies of the world, including the United Sates where interest rates are still low compared to earlier levels, will continue to put a heavy load on the working of the banks and saddle the future with additional stress.
On its part, the World Trade Organisation (WTO) foresees a feeble global trade recovery during 2017. Global trade could inch up slightly in 2017. But WTO remains fearful that the threat of growing protectionism and sundry other uncertainties could slow down global growth and recovery. WTO has cautioned that "the unpredictable direction of the global economy in the near term and the lack of clarity about government action on monetary, fiscal and trade policies raises the risk that trade activity will be stifled". Britain's, and later possibly France's decision after the elections later this month, to leave the European Union would certainly hamper global economic growth.
France far-right leader has reportedly promised to hold a referendum on France's membership of the European Union if she wins the election starting on 23rd April 2017. Early this week, as reported by the news agency AFP from Berlin, "the Chiefs of IMF, WTO and OECD (Organisation for Economic Corporation and Development) vowed Monday in a joint statement to defend free trade against creeping protectionist trends, amid growing global alarm over U.S. President Donald Trump's America First call". The threesome added that "Disappointing trade growth figures and the danger of increasing protectionist tendencies give us a clear incentive to support the (existing) international trading system even more".
Copyright Business Recorder, 2017