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Bailout package for leather industry



The leather industry contributes five percent to the gross domestic product and about seven percent to the total export earnings whereas about 200,000 workforce is engaged with the sector in the country. Pakistan is a major producer of leather products, includingfootwear, garments, gloves, shoes and other miscellaneous goods. At least 2,500 tanneries and footwear manufacturing units are operational in Karachi, Lahore, Sialkot and Kasur as the leather sector is the second most dynamic after textiles and 90 percent of the leather products are exported, earning precious foreign exchange for the country. According to an official of the Pakistan Tanners Association, leather exports of the country has been hovering around $1.196 billion for the last five years whereas leather export of China has increased by 19 percent, India by 63 percent and Bangladesh by 73.58 percent during the period. Bangladesh is even taking over the Pakistani markets in European Union and elsewhere and is now earning more than $1.12 billion a year.

The Export Development Fund has now approved projects worth Rs 1 billion to arrest the declining exports, including development of a tannery zone in Sialkot at a cost of Rs400 million. The Environmental Protection Agency is mandated with supervising and implementing the projects with technical and financial assistance of the United Nations Industrial Development Organization. The international buyers were wary of the environmental issues in Pakistan, especially water pollution, caused by the tannery industry. The projects will address their concerns to a large extent. The board has also allocated Rs530 million to hold road shows in Kazakhstan, Kyrgyzstan, Uzbekistan and Tajikistan. The Pakistani products in the pharmaceutical, textile, sports, surgical goods, agricultural products and auto parts will also be showcased in the shows to be held in May. The Central Asian Republics are a potential market for the Pakistani products, but the Pakistani business community has failed to grab its due share. However, Pakistan has edge over India and Bangladesh to enhance its exports to the landlocked countries due to advantage of regional connectivity projects.

The road shows will provide an opportunity to the private sectors of the Central Asian States to establish business-to-business contacts with their counterparts in Pakistan and get quality products at competitive prices. The main thrust of the government should be to put our own house in order. The Trade Development Authority, Export Development Fund, ports, and shipping and airports authorities should work in tandem to facilitate export promotion activities. The chambers of commerce and business organizations should contact with foreign buyers to get orders for the Pakistani products in collaboration with commercial attaches of the Pakistani missions abroad.


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