Pak's Textile Factories

Pak’s Textile Factories Shut Down Due To Cotton Shortage

The already fragile Pakistan economy, hit hard by the devastating floods, now faces the shutdown of textile factories as the cotton crop has been destroyed.

The cotton shortage has forced the owners to shut down textile factories after the floods. The mill closures underscore challenges for the sector that employs about 10 million people, accounts for 8 percent of the economy, and adds more than half to the nation’s export earnings, reported Geo News.
While the larger firms are less affected as they are well stocked, Pakistan’s small factories making bedsheets and towels for export to the US and Europe have started to shut down, The News reported.

Pakistan Textile Exporters Association’s patron-in-chief Khurram Mukhtar said that a shortage of good quality cotton, high fuel costs, and poor recovery of payments from buyers are the reasons behind the closing of small textile mills.

Mukhtar said that larger firms supplying global companies like Nike, Adidas AG, Puma SE, and Target Corp are well stocked and hence, they are less affected, reported Geo News.

The recent floods, which submerged a third of Pakistan, killed more than 1,600 people and damaged about 35 percent of the cotton crop, reported Geo News.

The latest blow comes at a difficult time for the South Asian nation already struggling with high inflation and falling currency reserves.

Due to an “unforeseen downturn in the market and unavailability of good quality cotton” following heavy rains and floods, the company’s mills have been temporarily closed, Faisalabad-based AN Textile said in an exchange filing earlier this month, reported Geo News.

Cotton production in Pakistan could slump to 6.5 million bales (of 170 kilograms each) in the year that started in July, compared with a target of 11 million, Mukhtar said.

That could force Pakistan to spend about 3 billion to import cotton from countries such as Brazil, Turkey, the US, East, and West Africa, and Afghanistan, said Gohar Ejaz, patron-in-chief of All Pakistan Textile Mills Association.

About 30 percent of Pakistan’s textile production capacity for exports has been hampered because of cotton and energy shortages, Ejaz said.

Pakistan’s textile sector, which exports about 60 percent of its production, is also facing poor demand in the domestic market due to fragile economic conditions. (ANI)

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Pak Security Policy Charts A Laudable Course

Pakistan after 75-years of its existence has released its first ever National Security Policy (NSP), which it claims will ensure human security for the ordinary Pakistani masses.

A critical review of the recently released National Security Policy (NSP) of Pakistan by its National Security Advisor, Yusuf Moeed, reveals that it’s a document which contradicts itself through its various promises and their delivery mechanism. Further it also reveals that how the military-political combine in Pakistan has controlled so far and plans in the future too, how to control the distribution of resources in the country, consolidate its power over every aspect of the governance, every state organ and the civil society.

The unclassified part of the NSP spread over a 62-page document loftily talks about the parameters of the national security framework, enunciates its implementation strategy, outlines policy guidelines for bolstering national unity and securing the country’s economic future, besides ensuring its defence, territorial integrity, and internal security, guiding principles for foreign policy in the changing world and linking all this to the human security.

The NSP peppered with ostensibly altruistic claims, looks like a bunch of hollow words with no apparent practical roadmap for the future. The policy claims to have been a result of consensus with ‘all stakeholders’, but strangely enough, no defence or security expert, economist, social scientist and most all any parliamentarian has not been consulted on the issues handled by the NSP.

NSP has finally been formulated for the first time in 75 years, since the existence of Pakistan but without taking parliament into confidence. The policy formulators in a bid to undermine parliament’s role stated that policy formulation, especially the one pertaining to national security, is a prerogative of the executive branch in the entire democratic world.

Thought that might be the case. But in a parliamentary democracy there is a unwritten understanding that the executive branch will always be answerable to the parliament and that no policy, no law could be made without addressing the concerns of the various stakeholders in the government and above all the people’s will.

It is ensured by not only allowing the parliament to debate and discuss every aspect of the government’s decisions but also by including the gist of those discussions.

Further, one wonders how a new strategy could be formulated without delving into the past’s mistakes or misadventures, as has happened with Pakistan and its neighbours.

Perhaps for the first time in Pakistan’s history, a civil government has admitted that without ensuring economic security, “traditional security”, i.e. defence, is not possible. Though in reality the country’s impoverished economy has collapsed under the burden of the traditional military-security combine. The document seems to have provided only disjointed and abstract thoughts and views and fails to provide a clear connection between traditional security and human security and ways to implement it.

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Though human security is mentioned in the title of the document, yet it is mentioned only casually and superficially, and that too in the last chapter of the document.

NSP’s emphasis is undoubtedly on defence. And here too it reflects Pakistan’s obsession with its traditional rival and bemoans the imbalance between the two in the sphere of conventional weapons.

If the Pakistan government really wants to be seen as the one, which is committed to rebuilding the fragile economy of the country, then different contradictions and demands have to be set right first. Then all aspects of traditional security must be subjected to economic imperatives, which could warrant fruitful results for the economy and could flow directly to the masses.

In the current background of  ‘global village’ Pakistan should try for peaceful settlement of its disputes with all neighbours, in concurrence with mutually beneficial trade and investment policies, and building economic synergies to strengthen economic interdependence.

The NSP ignores the fact that all aspects of traditional security are linked to economic imperatives. This further requires resolution of  ‘core issues’ through negotiations – not a reiteration of the earlier strategy, which has not worked.

For ensuring economic security, every country requires to strengthen regional cooperation and economic partnerships, rather than regional conflicts. But, the NSP lists several geostrategic compulsions – which may not help it to consolidate economic potential at a regional scale.

To deliver human security for the country’s masses and ensure a sustainable and participatory development model Pakistan needs to rework the whole paradigm of its governance, only then it could talks about the priorities of human security to raise the quality of life of its masses.

Further, the Imran Khan government, if it has to deliver for the masses then first it will have to demolish the old military combine of the country, which has prospered at the cost of the masses, filling the pockets of its generals and political leaders in the name of pursuing a defensive policy against its neighbour. This goal seems insurmountable given the manner in which the Pakistan’s political and military have supplemented and complemented each other over the years and they are in a position to destroy every move against them, in the future too.

(Asad Mirza is a political commentator based in New Delhi. He writes on issues related to Muslims, education, geopolitics and interfaith)

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Covid-19 And Asian Economies In 2021

We just left 2020, a year many wished was a bad dream. With a once-in-a-century health crisis sweeping across the world, it was one of the worst years in recent memories in more ways than one. The crisis tested each economy’s resilience of the countries and forced political and business leaders to lead from the front.

Governments introduced an unprecedented raft of fiscal measures to help avert further economic damage and implemented various support measures to reduce suffering by its populations. Business trends were accelerated, especially those that facilitated safe distancing, and this necessitated agility and creativity from businesses. It made champions of those that succeeded and unfortunately resulted in the collapse of those that were unable to adapt.

Vaccines for the Covid-19 pandemic were rushed out in record time but their long-term efficacy is unknown as their urgent need limited the ability to conduct lengthier trials and tests. Experts caution that even if the vaccines prove effective, it will take a while, perhaps until the end of 2021, before the virus comes under control globally. It will just be one tool in the effort to fight the pandemic. Cases in each country across the world needs to be very much lower before life can go back to something resembling normalcy.

To a certain degree, how each country’s economy performed in 2020 and is expected to do in 2021 is a reflection of how they handled the pandemic. Without effective control of the virus, normal business activities cannot resume. Consumers will not feel safe to visit shops and restaurants as they had done in the past. Some businesses will also have to continue to accommodate health precautions as they operate, hindering productivity.

It is, therefore, no surprise that Vietnam, which was able to control the virus at a relatively low human and economic cost, appears to be the shining economy among Southeast Asian countries. Based on World Bank data, its GDP is expected to grow 2.8 per cent in 2020 and projected expand another 6.8 per cent in 2021 for a net growth of over 9.6 per cent in the period from 2020 to 2021.

In contrast, all other major economies in Southeast Asia are expected to post negative GDP growth in 2020.

Based on World Bank data published in October, India’s economy is expected to contract 9.6 per cent in the 2020-21 fiscal year which starts in March 2020. As such, the full economic impact caused by COVID-19 is reflected in the numbers and hence not a fair direct comparison with the economies of Southeast Asia. It is expected to recover to post a growth of 5.4 per cent in FY 2021-22.

However, due to positive news on the COVID-19 containment front and the possible resultant easing of movement restrictions, Moody’s Investors Service in November raised its forecast for India’s growth to negative 8.9 per cent for the calendar year 2020 from negative 9.6 per cent. The rating agency forecasts a growth of 8.6 per cent in 2021.

The tourism-dependent economy of Thailand appears to be most impacted by COVID-19 economically. The Thai government estimated in 2019 that tourism accounts for 20 per cent of its GDP and is a major creator of jobs. This together with high private-sector debt and political uncertainty has resulted in a slower recovery than most other countries.

The World Bank projects that Thailand will have a net GDP growth of negative 3.4 per cent for 2020 and 2021. It is not likely to be able to restore its economic activity to 2019 levels till 2022. Singapore is in a similar situation with its economy expected to contract 6 per cent in 2020 and expand 4 per cent in 2021.

Singapore is the only one with what is considered a mature and developed economy among those countries mentioned in this article. It was already growing at a slower rate plus its economy is very much reliant on external trade with local economic activity unable to sustain its usual growth trajectory.

Pakistan’s GDP is estimated to have declined 1.5 per cent in the fiscal year ending June 2020 and forecasted to grow 0.5 per cent in 2020-21 for net GDP loss of one per cent although this has many dependencies. In normal times, Pakistan enjoys of long-term economic expansion of four per cent.

The other Southeast Asian nation which will emerge from 2020 economically battered and not able to recover till 2022 is the Philippines. Based on World Bank’s forecast published in October, its economy will shrink by 6.9 per cent in 2020, grow 5.3 per cent in 2021 for a net loss of 1.6 per cent. In November, World Bank revised this estimate downwards to negative 8.1 per cent in 2020 and 5.9 per cent growth in 2021 for a net negative figure of 2.2 per cent. They attributed this to “multiple shocks” that has buffeted the country from the Covid-19 health crisis, typhoons, and the global recession.

It is commonly believed that the stock market is a window into the future. Therefore, it is not a surprise that for 2020, the best performing market in Southeast Asia is Vietnam whose economy is also expected to expand the fastest. This is based on the Vietnam Ho Chi Minh Stock Index which tracks the performance of over 300 equities listed on the Ho Chi Min and Hanoi Stock Exchange in Vietnam.

The index ended the year about 14.3 per cent higher than when it started. Most of the other major Southeast Asian indices closed the year down except Malaysia’s KLCI which was up about one per cent. Singapore’s Straits Times Index was the worst performing closing the year down almost 12.2 per cent.

The Indian financial market was surprising resilient with the SENSEX posting a gain of over 15 per cent in 2020 which is even higher than Vietnam’s. With events of 2021 still up in the air, and with India’s economic activity as well as the course and duration of the pandemic hard to predict, could the market be betting that the economy will outperform economists’ expectations in 2021? (ANI)