Over the course of the past two months, one of Pakistan’s largest industries has been running from pillar to post in a desperate attempt to secure raw materials. From writing letters to the prime minister to knocking at the doors of the US Ambassador in Islamabad for help Pakistan’s textile industry is, to put it mildly, in shambles.
Not enough cotton was grown in the country this year on account of the floods to meet the demands of textile manufacturers. And with Lines of Credit closed due to the ongoing economic crisis, importing the cotton is proving to be a herculean task.
And textiles is not the only industry getting swirled up into the fast-growing tornado of doom and default. With dollar reserves falling to drastic levels, talks with the International Monetary Fund (IMF) dragging on at a painfully sluggish pace, friendly countries no longer reposing faith in Pakistan’s sincerity in implementing economic reforms, and help seeming far out, Pakistan’s industries are teetering on the edge right alongside the macroeconomy.
But is it as simple as all that? Can we really just say “it’s the economy stupid” and chalk up the dire straits our industries find themselves in to the economic mismanagement of our political leadership? That is what the business community would have you believe. At a recent event, former chairman of the Karachi Chamber of Commerce and Industry (KCCI) symbolically presented “the keys” to Karachi’s industry to SBP Governor Jameel Ahmed. We can’t run our businesses in these conditions, he said, maybe you’ll have better luck doing so.
The sentiment is clear, and to a large extent it is true. In its efforts to shore up reserves the government has made it hell to import vital items. But there is also an understanding that different industries in Pakistan often operate with a marked lack of foresight. “Their habit tends to be to make hay while the sun shines, and when times turn bad, ask the government to bail them out with tax breaks and subsidies and other such things,” explains Khurram Hussain, a senior business journalist and former editor at Profit.
For a long time, this is how our industries have chosen to operate: make quick buck when the opportunity presents itself with no care for contingencies for the future and make a whole lot of ruckus when things aren’t going your way. Decades of finding light at the end of the tunnel either through aid or government assistance have trained our business owners to be shortsighted. The only problem is, sometimes when you’re looking at a dark tunnel there isn’t light at the end of it because you’re staring down a shotgun barrel.
As Pakistan continues to struggle, there is an opportunity for introspection for the business community. Profit spoke to industry leaders, economists, and experts to try and understand how the ongoing crisis has impacted textiles — the largest export-oriented sector of Pakistan — and what the coming days might look like.