News
Monday, October 04, 2010
Pakistanis push trade, not just aid, after floods* Islamabad argues that trade will deliver long-term economic stability and will help combat terrorism by giving youths an alternative to joining militant movements
* Economic slowdown has left Western governments skittish about concessions that could cost jobs or votes
FAISALABAD: Pakistan argues that trade, not aid, will deliver long-term economic stability and will also help combat terrorism by giving poor youths an alternative to joining militant movements: money and jobs.
This eastern Pakistani city is known for the roar of its power looms and the buzz of its sewing machines. Now, following massive floods that devastated the cotton crop, another noise is threatening to drown those out: the pleas of a struggling textile industry begging the US and Europe to open their markets further.
It’s a tough sell in the West, where the economic slowdown has left governments skittish about concessions that could cost jobs or votes. The European Union has agreed to tariff cuts, but only temporary ones. The United States, where control of Congress is at stake in elections next month, is avoiding them altogether, touting instead its billions in taxpayer-funded humanitarian aid.
Pakistan’s textile industry, which employs more than 10 million people and produces more than half of its $19 billion in annual exports, has been hit hard by electricity and natural gas shortages, inflation and deteriorating security conditions in the past three years. Then, this summer’s floods wiped out 2 million bales of cotton.
“Obviously, we’re very worried, because we could lose our jobs any time,” said a 30-year-old father of three Muhammad Shahid, who stood soaked in sweat from running power looms. “We have to work so we can meet our living expenses.”
Some companies expect to reduce production by as much as 30 percent because of the cotton shortage. They may have to raise prices to stay afloat, though that would hurt them in international markets.
US and European lawmakers say they support the concept of giving Pakistan more market access.
In mid-September, the European Union pledged to waive tariffs temporarily on key Pakistani imports, a move that could be worth $290 million to $380 million a year. But businessmen here are sceptical the final deal will help much.
The US has proposed creating “reconstruction opportunity zones” in Pakistan’s militant-ridden northwest. Goods made in those zones would be given lower tariffs and other trade preferences. But it would do little to help the textile industry in Pakistan’s heartland.
Even that legislation is stuck in the senate, with little prospect of emerging while the US unemployment rate hovers near 10 percent.
“At a time when America is struggling to recover from the worst economic downturn in 80 years, and with national unemployment at historic levels, the last thing that the Obama administration should consider is a proposal that destroys critical manufacturing jobs,”
US textile industry groups said in a letter opposing the US chamber’s call for expanding the legislation in light of the floods.
One trade expert said that expanding Pakistan’s access to the US market would have little impact on American workers, who mostly make firefighting suits, auto seat covers and other higher-end textile products that Pakistan doesn’t produce.
Pakistani business leaders say the lack of action is particularly galling because of their country’s cooperation with US requests to root out militants who are launching attacks into Afghanistan from Pakistan’s northwest. The army-led effort has sparked retaliatory attacks by the militants on targets across Pakistan.
The relentless violence is bad for business. Pakistani businessmen sometimes miss trade conferences because Western countries are slow to grant them visas as they run security checks. Many would-be foreign investors are too nervous to visit Pakistan.
“Pakistan deserves more,” said Chairman of Faisalabad’s Council of Loom Owners Waheed Raamay. “We are the ally of America in the war against terror, and we have lost billions of rupees and thousands of lives in this war. And this is the time when they should support our economy.” ap
Courtesy www.dailytimes.com.pk