There was a time when the Pakistan textile industry was healthy, vibrant and profitable. It is now a shadow of its former self and many of the textile manufacturers have relocated, some to Bangladesh. In large part, the reason for their flight was the ongoing power crisis, with shortages of both gas and electricity cutting the throats of the manufacturers.
Now there is more bad news — the US licensor of Walt Disney has dropped Pakistan from the list of “Permitted Sourcing Countries” as of April 1, 2014. The Walt Disney empire is vast with global reach and immense purchasing power, particularly of cotton goods made in Pakistan. It has now banned any imports from us as we have failed to satisfy the Disney purchasers with regard to our goods as to the governance standards and working conditions within the cotton manufacturing industry; and this is going to cost us in the region of $200 million annually. Globally there is a tightening of standards by purchasing/importing states of cotton goods and garments. A series of factory fires and building collapses in the subcontinent has brought calls for an improvement of working conditions and greater attention to matters of health and safety.
Pakistan was already on a “watch list” and Bangladesh had received an even stiffer warning than had Pakistan, but was able to avoid a ban by getting a waiver as it signed up to the ILO/IFC “Better work programme” that allows close monitoring as part of a social audit. It continues to trade with Disney much to the chagrin of local manufacturers, who are reportedly critical of the Trade and Development Authority of Pakistan (TDAP) for failing to strike a similar deal for Pakistan with the Walt Disney Company. With much of our manufacturing sector literally on its knees, it is difficult to see why the TDAP was not more proactive and assertive in protecting our export assets, but thus far the TDA has offered nothing beyond a ringing silence.
Published in The Express Tribune, April 7th, 2014.