The Apparel Sector
Pakistan faces increased youth population facing unemployment. The Labour Force Survey 2014-15 says total Pakistani labour force is 61.04 million (46.38 million male and 14.66 million female). Of this, 3.62 million people are unemployed.
Pakistan’s adding a huge number of people to the labour force who face several disadvantages including limited job search expertise, a mismatch between education, aims and employers’ requirements and a lack of mobility, among other factors.
Pakistan needs 36 million more jobs in the next decade for a population increasing by 44% over two decades. The apparel and textile sector is a natural avenue for Pakistan to create jobs, especially for women and poor – it’s labour intensive, employs more women, and provides jobs allowing for skills acquisition.
According to a recent report by World Bank “Stitches to Riches: Apparel Employment, Trade, and Economic Development in South Asia” says that Pakistan has a fast-growing apparel sector that accounts for 19 percent of its exports and firms are competitive with global exporters in terms of prices. Yet despite low prices in most apparel products’ categories, Pakistan lags behind competitors in reliability and political stability.
The report further highlights: “One major problem … a lack of product diversity, with the country almost entirely dependent on textile products. Other problems are reliability, compliance, political stability and safety-especially regarding Foreign Direct Investment (FDI). Pakistan also has a large labour force, but productivity is affected by the limited availability of decent sector-specific training institutes and gaps in technical, design, and middle management skills”.
The report said women constitute the most of South Asia’s apparel sector’s labour force. Sri Lanka’s 71% labour force of this sector is comprised of women, India 35%, Bangladesh 34%, and Pakistan 31% respectively. 1% increase in output could increase firms’ labour demand by 0.33-0.35% in Pakistan, higher in comparison to the rest of the region. And a 1% in Chinese apparel prices could increase firms’ female labour demand by 16.3%”.
The Economic Survey of Pakistan 2014-15 highlights that the textile sector contributes nearly one-fourth of industrial value-added, provides employment to about 40% of industrial labour force, and consumes about 40% of banking credit to manufacturing sector – accounting for 8% of GDP.
There is a very tough competition in global markets. The market needs high quality product on reasonable price. To improve the quality of Pakistani textile products the industry should consider the quality of raw material, aided by the research and development institution.
Dr. Vaqar Ahmed, Deputy Executive Director, Sustainable Development Policy Institute says “The competitiveness of apparel sector in Pakistan has been affected by
(a) Regulatory and political constraints;
(b) High and complex tariffs on apparel sector’s imports;
(c) Gaps in skills and technology in this sector;
(d) Challenges to enhancements in productivity of value added apparel items,
(e) Lack of participation in global value and supply chains;
(f) Insufficient trade facilitation, policy interventions and supporting instruments;
(g) Lack of public-private sector collaboration in apparel sector;
(h) Absence of coordinated support from formal (government) institutions in increasing apparel exports;
(i) Lack of product diversification in apparel sector;
(j) Weak compliance with labour and environmental regulations, and
(k) Inconsistencies in monetary policy and exchange rate regime.
Important also, is exploring how Pakistan can elevate the current levels of apparel sector’s competitiveness by making use of its GSP+ status and already negotiated bilateral and regional trade agreements”.
Export-oriented apparel production could increase Pakistani jobs, if Pakistan increases product diversity and reliability with focus on manmade products, and take advantage of new markets. Increasing textile & apparels production needs further decreased import duties on raw material and machinery, attracting global buyers and investors to invest and open branches in Pakistan.
The government must also focus on skill development programmes especially for women, so that they can enhance their skills and get opportunities to earn, thus increasing employment in textile sector and apparel sectors. For this, coordination between the centre and provinces needs improvement.
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The opinions expressed in this article are the author's own and do not necessarily reflect the viewpoint or stance of SDPI.