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Roving Periscope: 30 lakh textile, other workers may lose jobs in Pakistan

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Virendra Pandit 

 

New Delhi: Amid reports that a broke Islamabad is also considering rationing food supplies even to the all-powerful armed forces, and that many companies are paying only 15-days’ salaries to their staff, Pakistan is likely to see millions of employees and workers being thrown out of jobs in the coming weeks.

With hundreds of containers loaded with all sorts of imported stuff stranded for weeks because of lack of payments in US dollars at Pakistan’s largest port at Karachi, millions of textile and other workers across sectors are likely to face layoffs in the bankrupt South Asian country which is unable even to export finished goods.

Because of the ongoing energy crisis and electricity cuts, Pakistan has already lost export orders worth USD 1 billion this year.

According to the National Trade Union Federation of Pakistan (NTUF) Secretary-General Nasir Mansoor, over one million textile workers are facing retrenchment because they would soon have no cotton and no work.

Amid economic uncertainty in a cash-strapped Pakistan, its industrial sector is bracing for more job cuts and a sharp decline in production. Many companies are expected to default since increasing interest rates have compressed demand. In the absence of halted import of spare parts, machinery, and raw material, production has been severely reduced.

In the corresponding weeks last year, Sri Lanka faced a similar political and economic crisis and Colombo had to announce a default in April.

Now Pakistan, a poor nation of over 22 crore population, is going the Sri Lanka way while terrorists supported by the Taliban challenge Islamabad with threats of civil war.

Quoting Mansoor, The News International said  “At least one million informal workers– mostly from the textile sector– are likely to lose their jobs.” Informal workers in Pakistan will be left without access to any social welfare scheme or severance packages given their employment status, he stated.

Calling it a “bleak situation”, he said that many companies usually hire laborers from third-party contractors to bypass legal dues to them. Because of this, almost all workers are informal, and firing them becomes convenient as they cannot go to a court of law to seek legal remedies.

The existing workers might have to work more and harder to compensate for staff shortages without increasing operational costs for the industrialist.  “Most companies force informal workers to come in for 15 days in a month. And while they submit a month’s worth of work, they are paid only for the 15 days they come to the office.”

Still reeling under the aftermath of last year’s devastating floods, Pakistan’s industry is also in a piquant situation because of delays in the opening of letters of credit.

Until 2021, Pakistan was the eighth-biggest exporter of textile goods in Asia, the fourth-largest manufacturer of raw cotton, and the third-largest buyer of raw cotton. Its textile industry contributed over 60 percent to the country’s total exports and around 46 percent to the total output produced in the country.

Mansoor said nearly 45 percent of the cotton crop was washed away in the 2022 floods, severely impacting the industry.

Federation of Pakistan Chambers of Commerce and Industry (FPCCI) chief Irfan Iqbal Sheikh said, “Many companies have already suspended their operations because they do not have resources. The next three to four months are going to be tough for the economy.”

Containers with essential raw materials are stuck at ports for weeks and the lack of clarity from the Shehbaz Sharif government regarding import restrictions has only worsened Pakistan’s already crippled economic situation.

Recently, nearly 30,000 workers in the country’s automotive sector lost their jobs because of a sharp decline in annual sales, the Pakistan Association of Automotive Parts and Accessories Manufacturers said.