After the successful conclusion of the Saarc conference and the signing of the Safta agreement, Pakistan seems, according to Press reports, to have at last found a route to prosperity, employment, poverty alleviation, etc.
However, nobody is asking the pertinent questions such as, whether this change will improve the position of the industry in general, and our textile industry in particular, during the coming years. The sections of industry which say that the future seems promising, what do they mean? Can they really identify the areas of improvement?
According to the Economist's intelligence report (August, 2003):
1. Despite the government efforts to diversify exports and widen the industrial base, the industrial sector remains dominated by the textile sector.
2. The textile sector still represents 46 per cent of the total manufacturing and provides 68 per cent of Pakistan's export receipts.
The strong performance of the sector stemmed from two factors:
a. enhanced import quotas especially by the USA, the EU and Turkey, and
b. the industry has invested $1.5 billions in new technology and modernisation during the last three years.
The conclusion is that the efficiency and the innovation in textiles is the only hope to get the country out of its economic problems. Now let us consider the above points and ask ourselves- will the "Safta" help to diversify our exports and widen our industrial base? The answer is "No", because our overall industrial base is still too weak to stand the competition from India and China. We see our markets are already flooded by Chinese goods and under-cutting local prices by large margins.
What does this show? Our industries are still in infancy or they are making too much profit or their cost of production is too high. Whatever the cause the effect is that many of these industries will close down, the country will become more dependent on imports, creating more unemployment and more poverty.
The argument that our industrial goods will have large Indian market is valid only if we are competitive in our prices and quality of our products. It is true that the principle of the survival of the fittest has to be applied, yet we must not forget that subsidies and protection are being received by our competitor industries.
We must also look deeply how other countries are making their industries TRIMS (Trade Related Investment Measures) compliant. India is certainly changing its tariff categories by re-defining them on the basis of quality and performance while at the same time helping its weak industries to overcome quality and productivity problems.
Textiles: Coming to the textile industry, we are behind India and China in the following areas which need investment and time. Other problems related to tariff, local taxes etc. can be solved:
1. We have very weak textile engineering industry. A recent survey shows approximately 500 small/medium/large units engaged in servicing the Pakistan textile industry employing 50,000 work force, 80 per cent of this sector comprises small workshops, 15 per cent medium and 5 per cent large workshops.
Almost all the large workshops are in the public sector. Small units cater cottage and low grade units, medium units supply non-critical parts to textile mills and big shops owned by the government have supplied looms and spinning frames in the past but presently are in difficulty owing to lack of R and D and demand of new technology.
The small and medium units work on reverse engineering principals, only very few work according to the engineering drawings. Most of the units neither have their own material testing facilities nor have an access to any service from outside. Although reverse engineering is practised yet copying without material testing results in poor quality or in many cases in an under- or over-engineering, hence increasing the cost. The rapid changes in machine tools have to be taken notice of, as because of the import-oriented policies, very little investment went into the engineering sector during the last few decades.
Human resource: Everyone talks about cheap labour but no one relates it with productivity. Our low productivity is due to illiterate labour force. All the recent surveys suggest more than 50 per cent illiterate labour on the shop floor. It is absurd to expect electronically fully loaded machines to be handled to get optimum productivity from illiterate labour force.
A massive drive is needed to improve literacy in the industry, it is heartening that APTMA and groups of mills like the Nishat, the Crescent, the Din, the Monnoo, the Tatta, the International Textiles, the Gul Ahmed, the Al-Karam and many others are individually trying to make their labour literate. The process can be accelerated if the finance minister exempts this expense from tax. After all mill owners are doing the work which should be done by the government.
If the ISO certification can be subsidized why not literacy drive; any way the ISO without literacy is of little value.
Technical man-power: As compared to India and China, our technical manpower is not qualified. The industry needs fully qualified manpower in areas such as spinning, weaving, knitwear, processing, garment, filament plants, fibre plants, etc.
A recent survey shows technical man-power requirement is 12,750 graduates whereas total number of technical personnel available up to 2003 was approximately 7,950, so there is shortage of 4,800 graduates in textile science.
Our technical institutions are producing nearly 400 students per year, by this rate our present requirement will be fulfilled in 12 years. This is without taking into consideration the future expansion or modernization.
Institutions: There is acute shortage of faculty staff in our present institutions, when working out the requirement in line with higher education policy laid down by the Higher Education Commission, we require by year 2010 165 M.Sc's and 86 PhD's whereas at the moment approximately 10\12 M.Sc's and same number of PhD's are working in these institutions.
One needs little imagination to work out how can this requirement be met without a massive investment, even if such an investment is forthcoming. The time will be a factor to reckon with. There is shortage of lab equipment, testing equipment and classrooms as well.
Laboratories: Talking about value addition, we need testing laboratories which are accredited to international labs, so that our export samples and other tests could be exchanged with our buyers in different countries. The funds required to bring them up to date, must be provided. Training of existing staff in the labs, both public and private, is of utmost importance.
In a nutshell these laboratories, whether they are private or public must have state-of-art equipment and qualified textile graduates to man them. Presently our industry is handicapped without such facilities and have to send their samples to outside laboratories which causes delays and hence stumbling block in exports.
Diversification: We have talked about diversification so that our dependence on textile is reduced. But we should also look very carefully into the diversification within textiles so that we can get out of this triangle, that is China, India and Pakistan which are competing for the same type of products.
The emerging and growing market of technical textiles should be studied and the industry should be facilitated to go towards products related to technical textiles such as development of different kind of fibre material, transport textiles, medical and hygiene textiles, agriculture, horticulture and fishing textiles. Geo textile in civil engineering products and safety clothing textiles, ecological products etc.
Only going for specialized areas as mentioned above can bring us out of the competition of low grade textile producing countries.