Impact of Government Policies on Pakistan's Textile Industry: Decline in Faisalabad's Manufacturing Sector


On the right side, the headline from November 12, 2020, during Imran Khan's tenure as Prime Minister, highlights a surge in work within the Faisalabad textile sector. It mentions that there was so much demand that the labor force was insufficient, indicating a booming industry with high production levels and potentially positive economic activity.

On the left side, the headline from March 14, 2024, under the current leadership, reflects a downturn. It reports that many textile mills have been closed due to government policies, and even those involved in policy-making are affected. This suggests a significant decline in the industry, leading to factory shutdowns and the potential loss of jobs.

The juxtaposition of these two headlines emphasizes the economic challenges faced by Pakistan's textile sector under different leaderships, with one period showing growth and the other showing decline. This image underscores the ongoing debate about the impact of government policies on the country's economy.



 The recent events in Pakistan have sparked significant debate and controversy, especially concerning the policies and leadership of Mian Shehbaz Sharif. There has been much discussion about how his vision has impacted the country, with many critics arguing that his actions have been detrimental to Pakistan's economy and stability. This blog aims to delve into these issues, comparing two key periods in Pakistan's recent history: one under Imran Khan’s leadership during the COVID-19 pandemic and the other under Shehbaz Sharif’s current tenure.


During Imran Khan's government in 2020, Pakistan was grappling with the COVID-19 pandemic, yet the country's industrial sector, particularly in textile hubs like Faisalabad, Gujranwala, and Sialkot, was thriving. The government implemented policies that facilitated business operations, leading to increased production and economic activity. In Faisalabad, for instance, the textile sector experienced a surge in demand, with factories operating at full capacity, and the labor force struggling to meet the needs of the industry. This was a time of economic growth, with businesses benefiting from a conducive environment for investment and expansion.


In stark contrast, under Shehbaz Sharif's leadership, the situation has changed dramatically. Reports indicate that many large factories, including the renowned Satara Textiles in Faisalabad, have shut down, leading to significant unemployment and economic distress. The closure of over 100 major factories has left thousands of workers jobless, a stark reminder of the current economic challenges. The cost of production has skyrocketed due to increases in electricity, gas, and raw material prices, coupled with stringent import restrictions. These factors have stifled industrial growth, resulting in a significant decline in economic activity and job creation.


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A critical aspect of this economic downturn has been the increase in electricity prices. In July, the electricity production cost was around Rs. 9.03 per unit, yet the government has been charging consumers anywhere from Rs. 40 to Rs. 80 per unit. This discrepancy has raised concerns about the policies that have led to such high costs for the public. The former caretaker minister of commerce, Dr. Gohar Ajaz, highlighted this issue, questioning why the government sells electricity at such exorbitant rates when the production cost is relatively low. This issue points to deeper systemic problems, including the burden of capacity payments to Independent Power Producers (IPPs) established during Nawaz Sharif's tenure between 2013 and 2017.


The capacity payments, which have been a significant financial strain on the country, result from agreements made during Nawaz Sharif's previous government. These payments have added an extra Rs. 50 per unit to electricity bills, contributing to the current economic burden on Pakistani citizens. The issue of IPPs has long been contentious, with many arguing that these deals have done more harm than good to the nation. Imran Khan's government attempted to renegotiate some of these deals to reduce the financial strain, but the problem persists.


In addition to the economic issues, there have been accusations of treason and conspiracy against individuals who have engaged with international journalists, particularly from India. These accusations largely politically motivated, have been used to discredit opposition figures and journalists who are critical of the government. The case of Rauf Klasra, a prominent journalist, who was accused of treason for communicating with an Indian journalist, is a prime example of how these tactics are being used to stifle dissent. The labeling of such interactions as treasonous not only undermines freedom of speech but also distracts from the real issues facing the country.


The arrest of political figures like Shehbaz Gill and Ali Amin Gandapur has also been a point of contention. These arrests have been framed as part of a broader crackdown on dissent, with accusations of rebellion and conspiracy against the state being levied without substantial evidence. These actions have further polarized the political landscape, with many viewing them as attempts to silence opposition rather than address genuine security concerns.


As Pakistan navigates these turbulent times, the need for transparent and accountable governance is more critical than ever. The economic challenges, coupled with political repression are taking a toll on the nation. The government needs to focus on policies that promote economic stability and growth, rather than pursuing actions that deepen divisions and undermine trust in the democratic process.


In conclusion, the contrasting periods of leadership under Imran Khan and Shehbaz Sharif offer valuable insights into the current state of Pakistan. While Imran Khan's policies during the pandemic supported economic growth and industrial expansion, Shehbaz Sharif's tenure has seen a significant decline in these areas, with rising unemployment and factory closures. The additional burden of high electricity costs and the politically motivated persecution of opposition figures are further complicating Pakistan's path to stability and prosperity. Moving forward, the government must address these challenges with a focus on the well-being of its citizens and the long-term health of the economy.

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