Investment push

LAHORE: Concepts for growth are numerous. Growth could be triggered by corporate farming, industrialization through high-tech machines, IT exports, or even the export of human resources. However, there is no concrete plan in place.

We are not even concentrating on improving efficiencies in the textile sector, where we enjoy some comparative advantage. In textiles, our exporters are fretting about high gas prices, but the ground reality is that the current gas tariff is lower than in Bangladesh. Bangladesh recently increased its minimum wage from Tk8,300 to Tk12,500, which is equivalent to $112. This has made Pakistan the country with the lowest minimum wage of $110. Wages in other competing apparel-exporting economies are much higher. The monthly minimum wage for RMG workers in China exceeds $300, while it's $200 in Cambodia, $171 in India, and $170 in Vietnam.

The garment workers in Bangladesh have not accepted the newly notified minimum wage and are violently agitating in some regions. Last week, 150 factories in Dhaka were closed, and police registered cases against 3000 workers for inciting violence. The situation has remained tense for over a month. Foreign buyers have expressed concern over worker unrest. An official of the exporters association confirmed that buyers have withheld new orders until the situation calms down.

Meanwhile, these buyers will look elsewhere to book orders that they outsourced from Bangladesh. India, Vietnam, and Cambodia are trying to divert orders from Bangladesh, while our textile sector is still looking for alms from the state instead of taking advantage of this situation. We have the advantage of being a low-cost country. Besides wages, our water charges, steam production cost, and land are the cheapest among our competitors in Asia.

When China was targeted by the West, Bangladesh took advantage of the situation to grab a lion's share of the global textile market from China. Today, 3,500 Bangladeshi garment factories account for 85 percent of the $55 billion exports from the country. If the workers' agitation worsens, it will create opportunities for apparel industries in other countries.

It is too early to comment on the SIFC initiative that was launched during the last months of the PDM government. It promised to attract investments in numerous sectors. The initiative was supported by the caretaker government, but the promised or expected investments of several billion dollars have yet to materialize. If there are investors, they must be requested to move fast. We do not have time on our side.

The fastest return and benefits would come from corporate farming. However, no new corporate initiative on virgin land has been launched as yet. One hopes that the initiative was not just for public consumption.

Each corporate farming project would require $3-4 billion, but the investors in this regard have not yet come forward.

Pakistan also badly needs a cracker plant, which was expected to materialize through SIFC. In fact, the plant was promised by Saudi Arabia during the tenure of the PTI regime, but the project, worth $10 billion, is still in limbo. The cracker plant would make Pakistan self-sufficient in numerous raw materials that we import from all over the world.