Abstracts
Theme: WTO and Governance
Panel: South Asian Textile Trade in the Post-quota Era: Human Development Implications of the Agreement on Textiles and Clothing (ATC)
 Limitations of corporate social responsibility in the Indian garment sector: a case study from Delhi industrial area
Alessandra Mezzadri*
Abstract
The Multi Fibre Agreement (MFA) came to an end on the 1st of January 2005. While this means new prospects for many Asian countries that are net exporters in the sector, in terms of overall economic growth, the social impact of such growth is still unknown. In the case of India, garment production has been for long reserved to the small-scale informal sector, where conditions of work were quite precarious, and employers’ practices quite exploitative. The era of consolidation that has been triggered by the phenomenal expansion of garment production in recent years and now by the end of the MFA is leading to a shift of the production from smaller informal units to larger industrial setups, many of which show vertical integration between the different phases of the production process. Parallel to this process, the increasing attention towards corporate social responsibility and the consequent elaboration of codes of conducts seem to address the problem of ensuring better working conditions to the workers of the sector. However, some practices are difficult to be challenged, because employers build their competitiveness around them. This paper specifically argues that regardless of the process of “formalization” of the production that is taking place in India, informality is still the fundamental tool through which employers realise cost minimisation.
With reference to the industrial area of Delhi, the paper will in fact show that although production is becoming in-house, and the level of sub-contracting is relatively declining, the process of high value addition, such as embroidery for instance, is still confined outside the factories, in informal units scattered around the industrial belts, or it has even shifted to the villages, where the traditional household production is incorporated in the last segments of the international supply chain. This process creates an ambiguous industrial structure where the factory becomes the realm of formal activities, while outside of it; the other numerous workers involved in the production process do not have any security. In particular, in the Delhi area, two groups seem to be bearing the burden of the change while being the main actors in ensuring the process of value addition; women, who participate in the production only as home-workers, and children, mainly migrants, who are used heavily in the informal units around the industrial belts. The vulnerability of these two groups is used by producers for the scope of costs minimization in an always more competitive globalized sector. The marginalization of such groups outside the factories makes the attempts of implementing codes of conducts ineffective, and it represents the real challenge for corporate social responsibility in future. The paper will make use of both quantitative and qualitative data; the former comes mainly from the statistics of the Indian Apparel Export Promotion Council, while the latter is based on a period of nine months of extensive fieldwork done in India between October 2004 and June 2005.
* Alessandra Mezzadri is doing her PhD in Development Studies at SOAS, London. Her thesis looks at the transformations happening in Indian garment sector at the end of Multi Fibre Agreement (MFA). Her academic background is in economics and international trade.
Human Resource Issues in Textiles and Clothing Sector of Pakistan: Would the ATC Expiry Make a Difference?
Foqia Sadiq Khan*
Abstract
Lack of human resources is one of the key issues facing the textiles and clothing industry. In a country of 150 million people, non-availability of quality human resource calls for serious policy implications. During the course of the PhD dissertation, more than fifty textiles manufacturers were interviewed. Most of them complained about lack of textiles professionals and skilled workers. They complained about the lack of relevant education to impart appropriate expertise and skills. Professionals and skilled workers get on-job training and leave the respective employers on getting better opportunities. Therefore, the gains from providing quality training are limited from employers’ point of view.
Textile manufacturers are trying to address the collective issue in two ways: they are trying to set up textiles professional and workers’ training institutes themselves as in Faisalabad or they are contemplating getting trained work force from other countries such as the Philippines.
An attempt would be made to gather aggregate numbers of required textiles professionals and trained workers in Pakistan’s textiles and clothing sector and this demand would be contrasted with the available figures. Issue of quality and relevance of curricula would also be explored.
The conjecture is that issue of lack of quality human resources will become even more significant with the expiry of the Agreement on Textiles and Clothing (ATC). The competition would be tough and countries that do not have trained work force would tend to lose out. However, this hypothesis would be confirmed on the basis of a small-scale survey.
* Foqia Sadiq Khan is a Doctoral Candidate in the Department of Development Studies, School of Oriental and African Studies (SOAS), University of London. The working title of her PhD is “Patterns of Accumulation and the Rule of Law: A Case Study of the Textiles Sector in Pakistan”. She has worked on issues of governance, judiciary, rent-seeking and peace.
Post Quota Observations in South Asia: A Preliminary Investigation
Parashar Kulkarni*
Abstract
The objective of this paper is to understand the immediate impact of quota phase-out on the textile supply chain in South Asia. A brief fact-finding survey was conducted by the author in Sri Lanka, Pakistan, Bangladesh, Nepal and India, on the impact of ATC dismantling on the textiles sector. This involved semi-structured interviews with industry associations/business chambers in all five countries, business representatives and workers. In addition, secondary information from government departments and industry associations would be used.
The findings of this short exercise were that it is too early to predict the impact of ATC on the textiles sector in some countries. Businesses had exaggerated the impact to procure additional benefits in the form of tax rebates, since perceptions of businesses and actual data showed divergence.
Nepal and Sri Lanka were particularly hurt on account of higher labour cost and poor efficiencies. Nepal was landlocked and hence freight charges were higher compared to other countries. For Indian exporters it was business as usual. Pakistani exports declined slightly. Bangladesh was particularly unscathed and exports rose slightly. However, margins need to be studied.
The impact on workers was particularly a matter of concern. Employers used the ATC dismantling to bargain for better deals with workers. In Nepal and Bangladesh, wages were renegotiated based on uncertainty. Job security reduced in all countries. While in some countries women were impacted negatively, for example Pakistan, in other countries, possibly on account of the wage differential between women and men, women were preferred at the work place. In addition, in most cases, benefits in the form of overtime, long lunch breaks and travel facilities were reduced. Also, according to workers, working hours rose without a rise in salaries.
In nearly all cases, export margins have fallen. Importers negotiated contracts, and adopted opportunist practises by bargaining for lower prices. Most suppliers accepted lower prices, because the ‘China outsourcing fear’ was looming large. Niche markets in the form of handicrafts, designer garments, boutique products and lingerie were unaffected.
* The author works with Centre for Trade and Development (CENTAD, New Delhi), an Oxfam GB Initiative, as a researcher. His research sphere involves non-tariff barriers, south-south cooperation and supply chains.
What Has Come After the Quota Went? Gendered Employment in Pakistan’s Textile and Clothing Industry
Karin Astrid Siegmann*
The objective of the paper is to analyze the impact of the ATC expiry on gendered employment in Pakistan. The data source is SDPI’s survey of the textile and clothing (T&C) industry conducted in August-September 2005.
The quota system for imports of textiles and clothing under the World Trade Organisation’s (WTO’s) Agreement on Textiles and Clothing (ATC) was phased out in January 2005. This meant a quantum leap in the liberalization of trade in textiles and clothing (T&C).
The T&C industry has a crucial role in the economy and development of Pakistan. In Pakistan, the large scale T&C sector now caters for nine per cent of Pakistan’s gross domestic product (GDP), 46 per cent of manufacturing activity, and 68 per cent of Pakistan’s export earnings. It employs 38 per cent of industrial sector workers, making it the largest employer of female workers in Pakistani manufacturing.
Research on the ATC expiry has focused on its macro-economic implications. Thereby, many dimensions relevant to human development such as gender equality are ignored. It is anticipated that the liberalization will support growth in Pakistan’s textile exports, in particular in raw cotton and coarse fabric. Yet, employment--and female-intensive sub-sectors such as the garment industry may suffer. This aspect is of particular concern because female workers in Pakistan face limited alternative employment opportunities. However, so far no thorough assessments of the impact of the ATC expiry on gendered employment are available for Pakistan. The paper addresses this gap by answering the question whether employment of female and male workers in the Pakistani T&C industry has changed since the expiry of the quota system in January 2005.
* Karin Astrid Siegmann is a Junior Research Fellow at the Sustainable Development Policy Institute (SDPI) in Islamabad, Pakistan. She holds a Ph.D. in Agricultural Economics from the University of Bonn/Germany. Her specialisation is in gender and globalization. |
