According to the representatives of the value-added textile associations, almost seven million people have been laid off in textile and textile-related industries. The reason for this is the steepest fall in exports and the never-ending economic crisis. The industry is likely to close down for an unspecified amount of time and many units have already been shut down. There is also a shortage of textile-producing raw materials. Many orders have been cancelled due to the delays and this is leading to the shutting down of the factories.
The layoffs and closure of production units are not limited to the textile sector. Many other industries have also closed their production units due to the worsening economic situation. Recently, Indus Motors shut down its assembly plant, and Diamond Supreme has also halted production due to the unavailability of raw materials.
The textile industry has put forward its grievances about the lack of availability of raw materials and the government’s non-cooperative behaviour. They stated that the government has kept the import of raw materials for the textile industry third on the priority list even though this sector brings in a large sum of dollars into the economy. The government has kept essential food items at the top of the priority list and energy-related imports, at the bottom. Both are extremely important, but they only further deplete the already negative balance of payments.
Pakistan’s economic crisis is getting more severe as time progresses. The economy is in shambles as of now. The closure of industries may not affect the industry owners as such, but those who get laid off due to these closures will find it difficult to survive. The inflationary pressure had already increased the prices of basic food items to unprecedented levels, and even with jobs, people were finding it difficult to put food on their tables. Now that many are without jobs, it is likely that many will go to sleep hungry.
The issues the country is facing are multifold. It is not only the closure of industries but an overall negative environment in the economy. The Bank of Punjab is facing high deficits, the reserves have fallen to an all-time low, and the circular debt keeps increasing. Moreover, there is a lack of investment due to the volatile financial markets and the return on terrorism. Capital flight and brain drain are also occurring now.
In order to address issues that Pakistan is currently facing, it is important that policymakers take action now to improve macroeconomic stability through increased fiscal discipline and improved monetary policy management. In particular, it is essential that public debt levels be reduced through more effective tax collection systems as well as more efficient spending on social services and infrastructure projects. Furthermore, improving access to finance for small businesses can help stimulate private sector activity which will lead to job creation and higher incomes for households. Finally, encouraging foreign direct investment in key sectors such as energy production can help boost productive, capacity over the medium-term allowing for sustainable growth in line with global trends. The government must take measures to save the industry.