A study, if undertaken, would reveal the presence of subtle diplomacy which provides an edge to industrialized nations over developing countries. The Least Developed Countries (LDCs) are safer till the time they are categorized into ‘developing’ones.
Free trade regime is a hollow slogan to give an impression that every trading partner would be treated equally.
With meagre resources and illiteracy dominant in Pakistan, the terms and conditions for equal status are harsh, involving unbearable expenditure.
For the benefit of manufacturers, particularly the small and medium-sized industries, few proposals are made here:
* The industry should be located in a proper industrial area. A medium-sized towel factory requires around three to five acres of land. The building should be constructed or renovated in conformity with all modern industrial requirements.
* Along with the ISOs, the WTO has also added labour and environment to its list. There are regulations like the safety, health and environment (SHE), the social accountability (SA-8000), etc. The ISO-9000 relates to documentation system as it creates internal and external discipline in industries.
The SA-8000 relates to social accountability, safety, welfare, and security of labourers working in a factory. It assures the availability of water and fire extinguishers, cleanliness, wages, over-time, running of canteen, applicable dress code — apron, gloves, mask, ear-plugs etc., observance of holidays, over-time limit, and payment criteria. The SA-8000 inspectors visit factories to ensure implementation of the rules. They have the right to meet workers personally, check their IDs, and obtain any information they need. The setback, perhaps could be the labourer’s choice to work in the SA-8000 system but to draw wages from the old system, through which they can earn more.
* The inspectors have a right to cancel certification until the insdequacies are removed and the factories re-audited.
* After the SA-8000, factory owners will obtain the SHE certification. It requires provision of open space, trees and a garden for the relaxation of workers. It proclaims multiple exits in the event of fire, flood or any other calamity. The waste water treatment plant (reverse osmosis process) is mandatory. Drinking water and food should be contamination-free and in case of food poisoning, the factory owner could be questioned (although the worker may be eating anything at home), safety insurance and education of children must be taken care of by the management. As regards the SROs relating to labour and environment, the government, with the support of other states,should defer its implementation for at least 10 years, with gradual implementation.
* These rules are likely to hamper the developing countries, while the LDCs too, will suffer upon gaining the status of developing countries.
Pakistan is in a critical situation. It’s economy is being managed by the IMF, the World Bank, etc., which have an unfriendly export attitude. They are concerned with the reduction in tariffs, free import, internal revenue collection but are not offering incentives for export. They are against any relief in utilities’tariff, particularly that of electricity.
Next is the sales tax, which is high on the priority list, and is considered the main future tax. None has any objection in paying, but its laws are crushing taxpayers, particularly the industrialists and the exporters. With regard to the ISO standards, there should be only one ISO-9000 for the time being as small- and medium-sized exporters cannot cope with the expenses which these systems impose.Their implementation should be made gradual.
It may be noted that for years to come, Pakistan will not have a level ground in exports due to the IMF, the World Bank and WTO conditionalities. The cost of local raw material will remain high on account of heavy taxation and inefficiecies in revenue collection, giving way to unprecedented corruption at lower level. The induction of numerous central and provincial agencies consumes time and money of exporters in solving non-issues Which escalates the cost of production.
In view of the above constraints, the towel industry should prepare itself to conform to the maximum to the WTO conditions and the ISO standards. It is advised that every factory should have two operations, either weaving and dyeing;or dyeing and stitching; or weaving and stitching.
This will help them to adopt the WTO rules easily than going for all the processes simultaneously, which could prove difficult to manage. The inspectors will be happy if two operations function satisfactorily, while ignoring the third.
Big factories will, however, survive on account of their financial strength, The small and medium factories will have to opt for mergers as this will elevate their status to the level of big industries.