Is a business decision by a large textile concern a sign of the times?
Textiles. The sector used to be the sturdy, dependable, meat-and-potatoes of our manufacturing sector. An agricultural nation we might be, but textiles was, and is, what dominates our manufacturing industry. One wasn’t, therefore, reassured about the state of our economy when the Chenab Group, one of the country’s leading textile groups, made public its plans to shift over to the real estate sector.
It would have still been reassuring if the motive for the shift had been a diversification. After all, wasn’t the group already involved in many other sectors? Or that, perhaps, it was leveraging Pakistan’s rising real estate sector to invest the capital that can’t immediately be spent into its core business. That, unfortunately, wasn’t the case. Turns out that sales in general and exports in particular have taken a hit on account of a number of issues. The power crisis, the security situation, the political crises and the issue of monetary policy put a spanner in the works for many a possible international contract.
The one episode that sort of signified the beginning of the end for the Chenab group was the blockage of natural gas for 17 days in 2007, leading for them to renege on sales orders for Christmas and the New Year. High-profile cases like these serve as a warning bell for the League government, which considers itself to be the party of the business community. The party came to power on an electoral platform that included getting rid of the power deficit, and it has done some work on that front but a lot still remains to be done. By showing some flexibility on the political front – not capitulation to an unreasonable opposition’s demands – but some flexibility on the Panama front, it could even help resolve the political instability a bit. The security quagmire is nigh completely out of the political government’s control, but instead, a slow dance between political governments and the powers that be. Perhaps, in the final analysis, as some observers are saying about the US presidential elections, a lot of the problems of the economy are not because of inherent flaws in policy but the consequence of burgeoning international competition and the obsolescence that accompanies automation.
Be that as it may, the government knew what it was getting into when it was canvassing for votes. It’d better have a plan.