Want to run away from the tension of highly politically charged cities like Karachi, Lahore and Islamabad, visit Pakistan's exports and small and medium industry city - Sialkot. A visit to this ancient city is always redeeming. Cynicism has no place here.
Although Sialkot's history dates back to some 5000 years, unfortunately not many traces are left except the name of Raja Sul in Mahabharata. The city was also known as Sakaladvipa - island of Sakala - in the Vedic period, as it is situated between the river Chenab and Ravi. But today it is known more as the city that produces almost 70 percent of the world's hand-stitched footballs, a range of other sports goods and sports wear, surgical instruments, cutlery and leather accessories for the motorbikes. Total exports from this city, which has a population of less than 700,000, is over US $one billion. Over a thousand exporters of all sizes - big, medium and small - are actively and single-mindedly busy in production and competing at the global market.
Sialkotis have a strong determination to meet the challenges of globalisation, in spite of many handicaps. They believe in 'business first.' That is what gives you the feeling that there is life beyond the judicial crisis, international pressures, conflicts on the borders and political impasse in the country. These issues are important for the country, but they do not fog the minds of Sialkotis as they do of the people in the big cities.
When I tried to probe the Sialkotis on these issues during my visit last week, their replies were short and there was little eagerness to carry the topic further. Yes, all they want to talk about is the challenges ahead for the exports industry of Sialkot. "Not a single day's strike is observed by the business in this city," says Pervaiz Iqbal Soni, President, Hosiery Manufacturers Association (Sialkot Chapter). "People do take out the procession but without disturbing the business, as for Sialkotis meeting buyers' deadline is more important than any other thing," he added proudly.
So let's go back to their favourite topic - business. According to Tahir Kapur, former President of Sialkot Chamber of Commerce & Industry (SCCI), two biggest threats to the over 100 years old sports goods industry are: introduction of machine stitched footballs in the international market and increased pressure from buyers and global agencies regarding social compliance - elimination of child labour, environment laws implementation, workers' health coverage, etc. The latter threat is also valid for the surgical industry.
Kapur feels that while the big players would be able to adapt themselves to the changing technological needs of the market, the majority of the small and medium football exporters are expected to be wiped out. All leading exporters agree that the big players will have to invest in new technology to produce machine-stitched footballs and that the medium and small players would not be able to afford it.
But the President of Sports Goods Manufacturers and Exporters Association, Professor Safdar Sandal, and the association guru Mehboob Sheikh feel that hand stitched footballs market will not be eliminated completely. "We pay premium for other handmade items because of their quality; similarly the hand stitched footballs will fetch better prices and their demand will stay." This doesn't mean that they want to rule out the machine stitched footballs threat.
One outstanding quality of Sialkoti entrepreneurs is that they don't wait for the rescue and dole from Islamabad. They are usually the first ones to put their money in the kitty to solve their problems and then ask the government to chip in. They have done so by building the country's first private sector managed dry port, then chipping in for the construction of major roads. And the biggest contribution was to build the first private sector airport, which is almost ready.
To meet the machine stitched footballs threat to small exporters who cannot have their own plants, Sialkot Chamber President Abdul Waheed Sandal says they have decided to set up a Sialkot Industry Trust This trust will establish a factory for machine stitched footballs. This project would be funded by 100 football exporters by chipping in Rs 100,000 each and with substantial support from the government. The exporters would be able to place their orders with this factory and meet the machine stitched football demand of their buyers.
WTO Social compliance regulations are a problem for all the export-based industries in Pakistan. The industry view is that while the Western importers push these conditions, they are not prepared to give a decent price. Social compliance has a cost which cuts into exporters' profits and when it is passed through to the buyers it makes our products uncompetitive.
The good side of these regulations is that the employers are forced to eliminate child labour and give a better deal to their labour. As these regulations are common for all the nations, they should add to the cost of our competitors also. The globalisation challenge is that all businesses have to remain agile, innovative, cost conscious and competitive. Our businessmen do suffer from some unfair hidden subsidies enjoyed by the Chinese. This is where our government should contribute by bringing the cost of doing business down in Pakistan.
One of the major problems faced by the Sialkot industries is the shortage of skilled labour. The elimination of child labour process has also closed the door for skill development of the workers. The century old skill development system was that on job training was given by the parents and seniors to young apprentices. Now the apprenticeship institution has been closed by the international regulations without providing an alternate training system.
Sialkot business leaders say what while Glove Manufacturers have established a small training school for women where they are taught cutting and stitching, there are no such facilities in other trades. Surgical instrument industry is now planning to set up a Surgical Technology Institute with government assistance which will train about 250 students.
All this is good but I think National Vocational Technical Education Commission (NAVTEC) Chairman Altaf Saleem should look into this matter and set up training centres in trades needed by the Sialkot industry. These institutes should be clubbed with the secondary schools so that by the time a student has done his Matric he/she has also a technical skill required by the industry. Educated workers will also improve the quality of production and make implementation of social compliance easier. Again, it would help in providing an alternate to the age old child labour practice.
In spite of these measures taken by the industry, it seems that the inevitable time has come for the Sialkot sports goods and surgical industry to go through mergers, acquisitions and consolidation. It is sad as it may lead to the natural death of many small players, but such are the ironies of capitalist economy and globalisation. Economic evolution has the same course of natural selection as that of human beings. (ayazbabar@gmail.com)