THE events of last few weeks are highly significant and will have far-reaching effects on the future of Pakistan’s textile industry.

The success of trade talks at Doha resulting in an agreement between more than 140 countries of the world will surely send a powerful signal through out the world of commerce . By agreeing to launch new global trade negotiations, the WTO is helping to create an image of delivering growth, development and prosperity through out the globe.

The World Bank has calculated that launching a new cycle of market opening talks, coupled with related reforms could add $2.8 trillion to global income by the year 2015, a decade after the round is expected to end. It has been agreed to begin broad and balanced negotiations next year on cutting farm subsidies and industrial tariffs as well as tackling a host of other barriers to trade. It is claimed that the stains of “Seattle” have been removed and the new agreement will liberalize global commerce and lift millions from poverty by boosting the world’s tottering economy. This agreement will also provide a psychological boost to the global economy at a time when many countries are on the brink of recession in the aftermath of the September 11 attacks on the USA.

It is, of course, certain that the outcome of the new trade round will affect the prices and availability of goods in shops around the world. Only future will tell how many millions of workers will loose their jobs and how many million others will find new work as the industry will rise and fall, because of the market opening moves set in train at Doha.

The entry of China as a member of the WTO along with Taiwan is another milestone in the world of commerce. China’s entry into the world trade body will add enormous inherent strength to the trade committee and it will help the developing countries in presenting their points of view more effectively. At the same time, for Pakistan, Chinese and Indian textile industries will become powerful competitors.

The next few years will determine whether the Pakistani textile industry can shape itself up and grab the opportunities offered, especially at the present moment when quotas are being enhanced and the tariffs are being reduced in many countries, as a concession to the Pakistan’s help against terrorism.

The Pakistani textile industry is planning to enhance the textile sector’s share in GDP from 7.5 per cent to 9 per cent and exports from the present $5.5 billion to $14 billion in the next four years. The plan envisages modernization, balancing and expansionon a large scale. Looking at the task and targets, the industry will encounter several problems at different levels. The textile industry in Pakistan is a capital intensive as well as labour intensive industry. Therefore, our attention should be focused on the following areas:

1. Investment in new technology

2. Investment in human capital

3. Investment in social capital

Technology: Due to several reasons, the textile machinery manufacturers have been reduced in number significantly. Few bigger groups have emerged which have more or less a monopoly in sophisticated equipment. The competition is, therefore, reduced and prices being asked for the new technology and equipment are enormous. Unfortunately, Pakistan has no machinery-making capacity worth the name, whereas our main future competitors, India and China, have huge capacities in this field. The cost of equipment for their textile industry will be much less than ours because we are dependent on imports. This will certainly put our expansion programme at a disadvantage and will increase our cost of production, However, this disadvantage can not be overcome even if we start building our own manufacturing capacity right away. So in the next few years, we have to live with the fact that the machinery will have to be imported and at a cost, more than our competitors.

Human capital: Recently, we surveyed two mills which are leading exporters in yarn ‘and cloth, one in Karachi and the other in Lahore. The survey was conducted to find out literacy level on the factory floor. The definition for literacy as used was: “One who can read and write simple paragraphs in his/her vernacular (own language) by understanding basic arithmetic”. One was horrified to find that 57 per cent of the workers were totally illiterate. Out of the literate 43 per cent, 56 per cent claimed to have primary education, 32 per cent middle level education, 11 per cent metric and 1 per cent Intermediate.

Going further into details, one should take the claim of primary education with a pinch of salt because most of the workers claiming to have primary education, are capable of writing their names only.

In today’s world, the demand of quality is increasing and the prices of products are directly linked with the quality. One can imagine the enormous difficulty for the management to produce quality with a labour force which is 57 per cent illiterate. All the new equipment and technology has built-in computers and electronic gadgets, How can an illiterate work force handle sophisticated equipment which has electronics and computers. It is not, therefore, difficult to conclude that with present scenario, our textile industry will not be able to optimise production and quality, even if they are in a position to invest enormous amount of money in the new capital equipment.

Social capital: The industry and the government are fully aware that the industrial work force is migratory . They work in groups and move from one area to another, thus hindering the possibility of becoming part of a social structure of any mill or factory. The factories even if they wish to, can not create a friendly and homogenic culture where people should try to exchange their experience and knowledge for the betterment of the factory and increase productivity and better quality.

Suggestions: Our first objective should be to make our factories’ workers fully literate. There are literacy packages available which can make an illiterate person read and write paragraphs and learn basic arithmetic. These courses have been tested on the ground and stand the test of their claims. The estimated time required for an illiterate person to achieve literacy is three months, two hours a day I.E a total of 180 hours . The question is, how to go forward and implement this programme in the textile industry?. Taking Rs5000 per month of 224 working hours as a basic take home salary the wage comes to Rs22/50 per hour even if the worker is fully paid for the time he attends classes to become literate, it will cost Rs4050, adding the cost of books and teacher, which is Rs140 and Rs150 per head respectively, the total cost comes to Rs4340 to make a worker literate. This is not a large sum to invest in a worker which he can pay back by increasing production and enhance the quality.

The textile associations such as APTMA, the bedware,the towels and the garment associations should represent to the government of Pakistan for the help to reduce this burden. After all, the ISO certification was subsidized by the government to a large extent. The ISO certification did have effect on the streamlining of management procedure, but it could have added much greater impact if it had been linked with literacy target.

The government could also get help from various external sources to implement this programme. In fact, most donor countries and the United Nations agencies will be more than willing to participate and assist in launching this programme.

The second step after achieving the certification of literate factory is logical to go for quality circles, quality assurance and quality control programmes. Here again the governmentt of Pakistan and the industry can seek help from Japan and United Nation agencies to install simple programmes in Urdu language which will help the industry to produce consistent quality for the export market as well as becoming more competitive if we look at the statistics of the Asian Tigers and surrounding countries, the progress is directly linked to literacy and other training programmes. Lastly, we should be reminded of porter’s theory of competitive advantages which says that “national prosperity is created and not inherited. It further says that nation’s competitiveness depends upon the capacity of its industry to innovate and upgrade its facilities.”