If the US (and the World) Really Wants to Help Pakistan….

A good place to start is economic and political freedom and the human struggle to achieve them.  Today, Pakistan is battling both terrorists and the recent floods.  The two battles are connected, and Pakistan needs to win both to achieve much of what we in the US and Europe take for granted.

Pakistan’s textile industry presents an easy way to help Pakistan win these battles.  According to the fibre2fashion Web site, Pakistan’s textile industry accounts for 60% of exports and 38% of the workforce (almost 6 million textile workers).  Leveraging Pakistan’s textile industry can provide lasting economic growth and jobs, and help Pakistan’s people recover from the floods, achieve a higher standard of living, and reduce recruiting opportunities for terrorist groups.

Currently, the US levies an average 17% tariff on textile imports from Pakistan, and Europe has a 12% tariff.  US and European consumers pay for these tariffs as needlessly higher prices for clothes, linens, and other textile products.  These tariffs also create an unnecessary obstacle for Pakistan to export these items.

Eliminating these tariffs and any import quotas permanently would benefit everyone.  Consumers would pay lower prices for clothes and other textile products.  Pakistan's economy would grow and create more jobs, and, as its exports grow, Pakistan would be less dependent on aid from US and European tax dollars.  Everybody wins.  Ask the US candidates who want your vote in November when they plan to eliminate permanently this 17% US tariff on textiles from Pakistan.  Our friends in Europe need to ask their candidates the same questions.


The Data

Pakistan's textile exports and US and European financial aid to Pakistan:

• Pakistan textile exports to the US were $2.7 billion in 2009 and $2.9 billion in 2008.  See the International Trade Administration report for Pakistan.  
• Pakistan textile exports to the European Union were €2.4 billion in 2009 and €2.6 billion in 2007.  See the European Commission report for Pakistan. 
• In 2009, US taxpayers provided to Pakistan $7.5 billion in civilian aid (schools, roads, bridges, power plants) and $2 billion in military aid.
• In 2009, Europe provided €220 million (EU, France, Germany, and The Netherlands) and the UK provided $83 million (see the Pakistan Report on the Human Security Report Project Web site).  

Information about Pakistan's flood situation changes frequently.  The impact has been severe, and there seems to be general agreement on the following:

• 1,600 people killed.
• 20 million people affected (homeless, displaced, etc.).
• 20% of Pakistan is under water.
• 30% of the cotton crop is forecast to be destroyed (Kissan Board of Pakistan).

Governments, NGOs, and private sector businesses have pledged flood relief to Pakistan through financial, military, and material resources to help with humanitarian needs.  Highlights of financial pledges:

• United States:  $200 million
• European Union:  $180 million
• India:  $20 million
• China:  $7.4 million
• IMF:  $450 million
• Private Sector:  Abbott Laboratories, Agility Logistics, Al-Bario Engineering, AT&T, BMW Group, Cathay Pacific Airways, Chevron Pakistan, Cisco Foundation, Coca-Cola Export Corporation, Coca-Cola Beverages Pakistan Ltd., DHL, DuPont, EMC, Environment Consultancies & Options, General Electric, Johnson & Johnson, Levi Strauss Pakistan, Monsanto AgriTech, Netsol Technologies, Proctor & Gamble, Pfizer Pakistan, 3M, Visa, and Wackenhut Pakistan (Pvt.) Ltd.

Growing Pakistan's Textile Industry:  Everybody Wins

The flood relief aid is a critical first step to help the people of Pakistan with basic needs for food, shelter, and medical care.  Once Pakistan's people make it through the floods, the next step is to recover and rebuild their lives.  People will likely migrate to Pakistan’s cities to find ways to support themselves and their families.  Pakistan's textile industry is an easy way for Pakistan and its people to rebuild and recover.

The second step is to eliminate permanently US and European tariffs and any quotas on Pakistan's textile exports.  Eliminating the tariffs would enable US and European consumers to help Pakistan's people, directly and without governments intervening, to recover and rebuild from the floods by growing its textile industry and providing jobs for people migrating to the cities.  This could double Pakistan's textile exports to the US and Europe to possibly $6-$7 billion dollars each.  How does this help US and European consumers?  Without the tariffs, consumers would pay lower prices for clothes and other textile products.  With the economic situation such as it is, lower prices benefit everyone.

Waqar Masood Khan, Secretary of Pakistan’s Textile Ministry spoke to this and was quoted in the Financial Times on 8/28/2010:  “This is really the time for market access that will provide employment from Pakistan’s textile sector and put people back to work.  Given how our economic situation is right now, more market access is highly desirable.”

Tahir Hussain, the chief federal official in Faisalabad was quoted in multiple sources saying, “There's a valid link between joblessness and militancy.  Wherever the militants are getting manpower, that's where the joblessness is.”  Terrorism affects everyone everywhere.  Eliminating these tariffs permanently and growing Pakistan's textile industry is an easy way to combat terrorism.

Consumers pay lower prices when they buy clothes, linens, and other textiles.  Pakistan's people get jobs and a stronger economy.  Terrorists' recruiting opportunities become more limited.  Unnecessary tariffs are eliminated permanently.  Everyone wins.  When politicians and candidates ask for your vote, make sure they understand this and are committed to eliminating these tariffs permanently.