KARACHI, July 13: Production and export of Pakistan’s carpet industry has been adversely affected by the return of Afghans back to their homes.

“Afghan refugees were involved in 50 per cent production of carpet accounting for roughly 60 per cent of Pakistan’s exports”, Nisar A Meer, the Vice Chairman of the Pakistan Carpet Manufacturers and Exporters Association (southern circle) told Dawn on Saturday.

These Afghan refugees, mostly settled in Peshawar and Attock areas, were actively busy in carpet production. Now they have returned home after the situation had started improving in the war torn Afghanistan. Out of total production of carpet, 98 per cent of the stocks are exported, while hardly two per cent is consumed here.

“Out of total 98 per cent exports about 60 per cent of carpet produced in Pakistan for export purposes are made by Afghan labours, while the rest is made by Pakistani labour,” Meer said adding that these Afghan refugees are now busy in Afghanistan in reconstruction activities instead of making carpet.

The actual number of Afghan refugees in carpet making could not be known immediately but he said that their repatriation has definitely caused a setback to the carpet industry.

Carpet industry has involved the services of these Afghan refugees due to their cheap labour charges as compared to local labour.

According to figures of Federal Bureau of Statistics (FBS), Pakistan’s carpet exports have fallen by 19 per cent in value and 25.50 per cent in quantity during 2001-2002. Nisar Meer attributed the decline to the September 11 incidents in the US followed by the return of Afghan refugees to their homeland in the last few months.

The carpet exports in 2001-2002 stood at $233 million (4.75 million square metres) as compared to $289 million (6.4 million square metres) in 2000-2001. Besides Afghan factor, September 11 catastrophe had also played havoc with the carpet industry, resulting in erosion of share of total carpet exports to 25-30 per cent as compared to 55-60 per cent in the US.

The US markets had been in the grip of recession soon after September 11 disaster and its impact was also felt by other main European markets.

Out of total carpet export, the share of Europe, which used to be 25-30 per cent, has now dropped to 17-18 per cent, he said.

He said around 7 per cent decline in the dollar value against the rupee in inter-bank market during July-June 2001-2002 had also affected our exports.

“Exports to the US, Europe and other countries are still going on but not with that pace which was prevailing ahead of September 11 incidents. Placement of orders by foreign buyers is also not satisfactory these days as the recession in the US and some European markets still looms large,” he said.

“There must be peace of minds among foreign buyers specially for buying the carpets and rugs. I think it is still lacking,” he said.

Carpet exporters are now in search of other markets like South America and East Europe so that the 2002-2003 could prove a better year for the country’s foreign exchange earnings.

Nisar Meer said exporters and the Export Promotion Bureau (EPB) are jointly struggling to open warehouses abroad. Initially efforts are under way to open warehouse in Germany and then in France.

He was not happy over government’s budgetary decision to abolish duty drawback, saying it will definitely affect exports in future.