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Textiles and Clothing in a Changi

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					            SDPI Research and News Bulletin
                                      Vol. 13, No. 1 Jan — Feb 2006




Textiles and Clothing in a Changing World:
Can Pakistan Catch up with the Front-
Runners?
Dr Anjum Altaf
anjum@sdpi.org

The textile and clothing (T&C) industry is the most interesting of the major industries to study at
this time. Its natural development has been the most severely distorted by a system of global
constraints that were only eased at the beginning of this year. Many people expected the removal
of quotas on January 1, 2005 to trigger a massive readjustment and the resulting cutthroat price
competition to drive production to the lowest cost locations.
      It is important to remember, however, that the quota regime was initiated over 50 years ago--the
first long-term agreement was enforced in 1962--and 50 years is a very long time. Much has changed
during this period that could lead to surprising and counterintuitive outcomes for the T&C industry in
future. The very length of the quota regime makes it necessary to analyze the industry in the context
of the major global trends that have defined the last quarter century or so.
      It will surprise many that the transition in lifestyles is a driver for the most profound changes in the
industry. Just one indicator can illustrate this point. Till the end of the 1960s, over 70% of men‟s shirts
                                                                                              sold    in    the
   It will surprise many that the transition in lifestyles is a driver United States
                                                                                              were        white
   for the most profound changes in the industry. Till the end of dress shirts. By
   the 1960s, over 70% of men’s shirts sold in the United States 1986, this share
                                                                                              was         down
   were white dress shirts. By 1986, this share was down sharply to 20%.
                                                                                              The        youth
   sharply to 20%. The youth rebellion made the world a much                                  rebellion made
                                                                                              the world a
   more casual place. The implication for the industry could be much                                      more
                                                                                              casual     place.
   understood by thinking of the difference between the Now instead of
   economics of selling dry fruit and the economics of selling a large quantity
                                                                                              of white dress
   fresh fruit.                                                                               shirts retailers
                                                                                              carry a dizzying
combination of colors, sizes, styles, fabrics and price lines with a smaller quantity of each product
type on their shelves.
      At the same time, the consumer has become increasingly more fashion-conscious--even faddish
as some old timers complain--with rapidly changing tastes. A product that gets outdated or misses a
particular selling period has to be disposed at a heavy discount. The proliferation of fashion design
institutes and the frequency of clearance sales is evidence of this development.
      The implication for the industry could be understood by thinking of the difference between the
economics of selling dry fruit and the economics of selling fresh fruit. Unsold dry fruit lives to be sold
another day; unsold fresh fruit at the end of the day is worth a fraction of its value. Errors in estimating
demand are very costly in the fresh fruit business.
      The bottom line of the change in lifestyle for the retailer of apparel is that many items of clothing
(not all but many) are being transformed from staple commodities to perishable products. If they don‟t
sell fast they add to costs. As a consequence, the focus of attention of retailers has shifted from
ensuring the cheapest supply to managing the demand side. The magnitude of potential loss of
revenue on the sales side often overwhelms the cost savings from finding a slightly less expensive
supplier. As early as 1985, losses associated with markdowns, stock-outs, and inventory carrying
costs for US retailers were estimated to be $25 billion. In the changed environment, other variables,
besides supply cost, have begun to have a crucial impact on profitability.
     Continuing with the fruit analogy yields a pointer to one possible direction for the future. Relative
to the US, fresh fruit and vegetables can be grown more cheaply in many other distant places. Yet the
bulk of the demand is supplied from within the US itself or its immediate neighborhood--what used to
be called „banana republics‟ because US firms produced their bananas there. This proximity of supply
to the consumer is a feature of the economics of perishable commodities.
     The second major change that has occurred during the last quarter century or so is the truly
amazing progress in information and communications technology. It is hard to recall now that only one
generation ago there were no pocket calculators, let alone laptops or the Internet. University students
used a slide rule for computation, a device that now belongs in the museums of science and
technology.
     It is not surprising that the first users of the new technology to assist with the problems of
managing demand were the food stores--beginning in 1970--followed by the leading apparel retailers.
The principal elements of this technology package were the uniform product code, bar codes, laser
scanners, and electronic data interchange. Using these technologies, retailers gained access to real-
time sales information collected at the register via bar code scanning. Today, the leading retailers
collect information on the sales of particular products at the size, style and color level, compile it on
Sunday night (after the weekend sales are known) and transmit an electronic order to the appropriate
supplier the same night. By the following Thursday, they expect floor-ready supplies delivered to their
individual stores.
     The use of these technologies in the industry is spreading due to the dynamics of competition just
as no bank today can afford to be without online services and ATM dispensers. One consequence is
that the leading retailers have begun to exert much more leverage in the supply chain compared to
the past. They now stock only the products on their shelves reducing expenses by pushing back the
burden of inventory on to their suppliers; they are forcing distributors and suppliers to install
expensive data processing technologies to comply with their requirements or risk losing their
customer; and they are asking for floor-ready deliveries to individual stores in smaller quantities and in
shorter delivery times. Industry analysts have highlighted the emergence of this phenomenon of lean
retailing as a key component of the retail revolution in the apparel industry.
     Similar to the distinction between fresh and dry fruit, apparel products are now split into what the
industry has termed replenishable and non-replenishable items. Replenishable items are re-ordered
many times in small quantities during a selling season, while non-replenishables are ordered a few
times at best if not just once. Low-cost items like hosiery, underwear and men‟s shorts are
replenishables while high cost, fashion sensitive items like women‟s dresses are non-replenishables.
The replenishable segment is growing in importance. In 1988, 60% of the sales volume in the US was
shipped on a non-replenishment basis; by 1992, this was down to about 20%.
     All these new variables affecting profitability, especially the inventory costs of distributors that
vary directly with the lead-time needed by suppliers, place a premium on proximity to the end market
as far as the supply of replenishable items is concerned. For the U.S. market, the average cycle time
for a supplier in Mexico is four weeks as against eleven weeks for a supplier in China--a difference
that translates into 100% increase in inventory costs for the distributor. For some products this more
than offsets the lower costs of production in China where wage rates are less than a third of those in
Mexico.
     The consequences can be seen in the pattern of trade. In 2003, the top five suppliers to the US of
men‟s and boy‟s denim jeans, a typical replenishable item, were Mexico, Costa Rica, Guatemala,
                                          th                 th
Colombia and Honduras. China was 18 and Pakistan 19 on the list. For the same product category,
of the top ten suppliers to the EU, six were neighbouring countries. By contrast, for a typical non-
replenishable item (women‟s and girl‟s cotton dresses), the top ten suppliers to the US were all Asian
countries. This clearly indicates how the market for apparel is being segregated and how completely
different considerations determine the sourcing of these different product types.
     These developments are leaving their imprint on the geography of production. The production of
low cost replenishable items is configuring itself in regional markets surrounding the major
consumers--the US being served to a significant degree from Mexico and the Caribbean; the EU from
Turkey, North Africa and Eastern Europe; and Japan from China. The production of high-value non-
replenishable items on the other hand is following the more traditional path of migrating to the lowest
cost producers most of whom are in Asia.
     Five global trends are accompanying this new geography of production. The first is the huge
wave of outsourcing of manufacturing and services from developed to developing countries. It is
interesting to observe how the characteristics mentioned above are shaping the nature of this foreign
investment in the T&C industry. For replenishable items, US firms are moving across the border to
produce in Mexico and Japanese firms are investing in China. The most revealing example, however,
is from Korea. Guatemala was the third largest supplier of men‟s and boy‟s denim jeans to the US. It
turns out that of the 244 companies producing apparel in Guatemala in 1999, 130 (more than half)
were from Korea. Clearly, proximity to the consumer and being integrated into the supply chain of the
leading retailers is important enough for Korean firms to invest not only in China but also as far away as
Guatemala.
     The second trend is the proliferation of regional and bilateral preferential trade agreements. The
pattern of regional markets in the textile and clothing industry is being reinforced by agreements that
often tie tariff concessions to the use of inputs from the consuming countries (e.g., US origin textiles and
fabrics). NAFTA, the Caribbean Basin Trade Partnership Act and the Euro-Mediterranean partnership
are good examples. It is important to remember that after the elimination of quotas discriminatory tariffs
remain as the major public policy instrument to redirect the flows of free trade. In South Asia,
Bangladesh is a beneficiary having free entry into the EU due to its status as a “Least Developed
Nation.”
     The third global trend is the quiet emergence of the knowledge economy and the increasing
importance of what is being called the creative worker, the worker that helps a firm to innovate, add
value to its products, and move up the supply chain. It is not possible to produce high-value items in
today‟s economy without a large pool of creative workers. The implications have been realized quickly in
East Asia where many countries, finding themselves unable to compete with China on costs, are
investing heavily in innovation and in attracting the innovative worker. This aspect is important for
apparel firms that wish to compete in the market for both replenishable and non-replenishable items and
for textile firms seeking to find new industrial uses for their products.
     The fourth trend centers round the rise of the efficient city as an entity almost independent of the
country in which it is located. In South Asia, Bangalore is a good example. It is now linked directly, not
through the national capital, to the global economy and investment is flowing to it quite irrespective of
the poverty in Bihar, the unrest in Assam or the hostilities in Kashmir. As long as Bangalore offers a
stable environment with good business infrastructure and efficient logistics what happens in the rest of
India remains virtually irrelevant to global business. And efficient cities have begun to compete with
each other for outsourced work. Thus Hyderabad and Chennai, led by their public officials and
chambers of commerce, are now competing aggressively against Bangalore for the software market. It
is significant to note that the Indian government is not lobbying on behalf of Hyderabad and Chennai;
the cities are out there marketing themselves on their own.
     This competition between cities for global business has given rise to a new set of comparative
indicators of business friendliness and efficiency. The time it takes from touchdown at the airport to
checking in at a downtown hotel has become one of the benchmark metrics in this new competitive
environment. It is no surprise that Shanghai has invested in the fastest and most modern train, the
world‟s first commercial magnetic levitation system, to link its new airport with its business district. The
30-kilometer journey is reported to take all of about eight minutes.
     A related aspect of this phenomenon is that these competitive cities have realized they must
become attractive for the global knowledge worker whose lifestyle is quite different from that of the
industrial worker. Singapore has gone to the extent of relaxing its prohibition on chewing gum, is talking
about creating a bohemian village and becoming a Renaissance City. Shanghai is pouring millions of
dollars into museums and an opera house. Dubai is transforming itself as a shopping and entertainment
haven. Investment in culture, called „cultural capital‟, has become just as necessary as investment in
science and technology and in physical infrastructure to be globally competitive in the post-industrial
knowledge economy.
     The fifth global trend is the emergence of the environmentally and ethically conscious consumer in
the developed countries. While we might consider this a phenomenon promoted by protectionist industry
lobbies, we still have to deal with the fallout. The soccer ball industry has already found itself vulnerable
to the charge of exploiting child labor. For the textile industry, the plight of the cotton pickers might turn
out to be its own weak spot.
     It was mentioned earlier that the production of high value non-replenishable apparel items was
migrating to the lowest cost producers not the lowest wage countries. Jobs are moving to low wage
countries with the largest and most productive talent pools, the most desirable locations and the most
efficient delivery logistics. Thus Indonesia, which in 2002 had an average hourly labor cost in apparel
manufacturing lower than that in China, is still losing market share to the latter.
     One can understand now why China is in such a sweet spot and emerging as a manufacturing
powerhouse. It is next door to the very large Japanese market and also has the most competitive
shipping times to the west coast of the US averaging between 12 and 18 days compared to as much
as 45 days from its ASEAN competitors. It has almost 100% literacy and a large pool of highly trained
technical workers. It has proactively identified a number of universities that it intends to raise to the
highest global standards within years. It has increasingly efficient cities, is investing heavily in the
infrastructure of business, and is pouring money into cultural capital to become attractive for
global capital and the demanding knowledge worker.
     Let us now see Pakistan in the perspective of these developments in the industry and the
global trends that have been highlighted. Is it possible that Pakistan would fall between two
stools--not being close enough to the large markets to be competitive in the low-value
replenishable products and not having the creative talent pool or the efficient cities to be
competitive in the high-value non-replenishable products? In the worst case, could Pakistan find
itself reduced to a provider of raw materials to producers elsewhere who have equipped
themselves to add value and be competitive in the global economy? And could the degradation of
the cotton pickers emerge as a new barrier to trade, further reduci ng its limited role in the global
economy?
     Of course, this need not be the case. If one can see far enough down the road, one can
identify the potholes, steer accordingly, and chart a successful direction. The industry has already
invested in modernization to be ready for the post-quota world. In future, Pakistani firms could
invest in countries like Turkey, Tunisia, and Morocco that are proximate to the large EU market.
Bangladesh is also a candidate for investment because of its tariff advantages. Pakist ani firms
could also explore niches in the large developing country markets of India and China that are
becoming more open under the WTO regime. The most important industry in the country could
spearhead efforts to reclaim the cities and to make them more efficient for business. It could
lobby for reform of the public school curriculum to move the country beyond the stage where 50%
of the population is still illiterate and the rest is getting an education that provides no skills to
integrate into the global knowledge economy.
     Most of these are changes where the industry needs to convince the various levels of
government to support its growth and development. This is no doubt a difficult challenge but one
that has to be faced sooner rather than later in the self-interest of the industry. But there are
areas where the industry is much less constrained and can act on its own. This space for
voluntary initiative provides room to demonstrate forcefully the industry‟s commitment to change.
     Establishing the Textile Institute of Pakistan is an excellent example. There are some other
possibilities. The industry could be proactive in offering incentives to growers to improve the
conditions of work and incomes of the cotton pickers. The industry could also conceivably lead
the way in the sphere of education by further raising the standards of the Textile Institute to
match the best in the world. It is here that the importance of being located in an efficient, safe,
and culturally vibrant city would be realized. Attempts to attract leading academics and
professionals for significant periods of time would flounder because of the poor image of Karachi.
Therefore, it would be in the interest of the industry to contribute to making Karachi a more
attractive place to live and work in. Little things can often set the ball rolling and make a
surprisingly big difference.

Acknowledgement
This is the edited text of the keynote address delivered on December 2, 2005 at the conference
on Teaching Textiles organized by the Textile Institute of Pakistan, Karachi.

Recommended Reading

On the T&C industry:
 A Stitch in Time: Lean Retailing and the Transformation of Manufacturing --Lessons from the
   Apparel and Textile Industries. 1999. Frederick H. Abernathy, John T. Dunlop, Janice H.
   Hammond, and David Weil. New York: Oxford University Press.

On the knowledge and creative economy:
 The Rise of the Creative Class: And How it is Transforming Work, Leisure, Community and
   Everyday Life. 2002. Richard Florida. New York: Basic Books.
   The Creative Economy: How People Make Money from Ideas. 2001. John Howkins. 2001.
    London: Allen Lane.

On global cities:
 The Global City: New York, London, Tokyo. 2001. Saskia Sassen. 2001. Princeton, NJ:
   Princeton University Press.
 “Cosmopolitan Cities and Nation States: Open Economics, Urban Dynamics, and Government
   in East Asia.” 2002. Thomas P. Rohlen. Stanford University: Asia/Pacific Research Center.
   http://iis-db.stanford.edu/pubs/12074/Rohlen_cosmopolitan.pdf
Cotton Pickers After the Quota Expiry:
Bitter Harvest
Karin Astrid Siegmann
karin@sdpi.org


Pakistan‟s textile and clothing (T&C) industry stands on women‟s shoulders. Under the scorching
sun, thousands of female cotton pickers work in the cotton fields of Southern Punjab and Sindh,
harvesting the raw material for the production of yarn, cloth, trousers, and t-shirts.
     Cotton pickers are responsible for the T&C industry‟s successes, but remain poor
themselves. Pakistan is the fourth largest cotton producer of the world and is expected to become
number three in its consumption this year. Cotton is planted on 3m hectares of land, producing an
output of 1.7m tonnes in 2003. An estimated 700,000 cotton pickers, most of them women and
girls, are employed on the 1.6m cotton-growing farms in Pakistan during the picking season
between September and December.
     Working conditions were extremely poor in the past. In 1999, pickers‟ pay was only about
Rs40-50 per maund. One maund is what a fast picker can harvest in a day, and half of that
weight is more common. Alternative sources of income are few, partially because unemployment
is high in the cotton-growing belt, and to some extent due to these women‟s low levels of
schooling. Educational limitations also weaken their bargaining power vis -à-vis their employers.
When their harvest is weighed, they are easily cheated on their daily wage. Overall, it is difficult
for them to negotiate better working conditions. This reality is compounded by their gender that is
often subjected to sexual harassment.
     The working environment of cotton pickers is full of poisonous pesticides. During the 8-9 hours of
daily picking, they are exposed to residuals of pesticide spraying. They consume water that is
contaminated with pesticides. Besides, pesticides enter the food chain via the exposure of the soil, of
                                             their livestock, as residuals in cotton seeds that are
                                             pressed to produce edible oil. The result is chronic
                                             pesticide poisoning. One of the few studies conducted on
                                             the health effects of pesticide application in Pakistani
                                             cotton cultivation finds that 74% of female cotton pickers
                                             are moderately pesticide-poisoned, while the remaining
                                             quarter has reached dangerous levels of poisoning.
                                                  The T&C sector, based on home-grown and hand-
                                             picked cotton, is the country‟s most important industrial
                                             and export sector. The year 2005 has meant a quantum
                                             leap towards freer global trade in T&C. The quota
                                             system, that had constrained exports to the main markets
                                             for T&C , was abolished under a World Trade
Organisation (WTO) agreement on January 1, 2005. Previously, T&C producers had to purchase
quotas in order to be able to sell their products to the main markets. Since January 2005, however,
buyers and sellers of T&C products no longer rely on access to quotas in order to export to the USA,
EU or Canada. This means a more competitive environment for a large number of T&C exporters
across Asia, Latin America, and Africa.
     SDPI conducted a study in 2005 to assess whether this change in the external trade environment
also trickled down to the cotton pickers and made a difference in their working conditions. What
difference could a change in the trade environment for T&C occur in these women‟s lives and
livelihoods?
     SDPI started its investigation with two contrary assumptions. The intensified competition that
is resulting from the abolition of the quota system has two aspects: price and quality. Prices for
T&C products have dropped because of the harsher competition amongst producers. If
manufacturers try to compensate such reduced income through cost cuts, this might be passed
on through the textile chain as lower wages to cotton pickers. On the other hand, producers try to
comply with environmental and social standards that are becoming an increasingly common
demand of buyers in the North. One aspect here is lower charges of T&C products with
hazardous materials, such as dyes but also pesticides. If this is the result of a freer trade
scenario, less strain may be put on cotton pickers‟ health.
     The preliminary results, however, show that little has changed for cotton pickers‟ bitter harvest.
T&C exports might have picked up, but the cotton fields haven‟t become a more likable location
since the quota system expired. Women‟s wages still stand at similarly low levels of Rs50-70.
Considering that price levels have climbed more than a fifth between 2004 and 2005, only purchasing
power has actually declined substantially. Pesticide use has grown from year to year, and yet,
protective gear is still almost absent from the fields. Resultantly, women complain about headache,
nausea, and skin irritations but don‟t have the money to consult a doctor and buy medicine.
     Evidently, if there is any link between the trade environment and the livelihoods of cotton pickers,
it matches the pessimistic assumption that harsher competition leads to pressure on wages. Deeper
analysis is needed to dig out the real reasons for the static hardship of cotton pickers. Their weak
bargaining power surely is a factor. The pesticide treadmill, i.e., the necessity to use more and more
pesticides due to resistances developed in pests, and also the fact that pesticide prices have dropped
due to import liberalization in 1995 facilitating greater consumption, is a serious threat to their health
and livelihoods.
     An important factor may be the political economy of the cotton chain in Pakistan. Yarn producers
have a powerful position in the industry and their economic importance is paralleled by the political
influence they exert. Despite the rhetoric of demanding clean cotton--i.e., cotton not contaminated by
cotton sticks, human hair, and polyethylene bags, as an input for their spinning mills--no incentives
are provided for growers to supply such uncontaminated cotton. Obviously, the profits that can be
reaped by selling poor quality yarn based on very low labour costs are higher than the premia for
uncontaminated yarn and cloth. However, recently a decision has been taken to provide such
incentives through the Trading Corporation of Pakistan (TCP). If implemented, this might translate into
better pay for cotton pickers as it is they, ultimately, who control this type of contamination.
     What to do? Clearly, cotton pickers need to be provided with wages above subsistence level, e.g.
in the form of incentives for clean cotton. The abovementioned new policy to provide quality premia
might be a step in the right direction. Awareness should be raised about the relevance of protective
gear for all stakeholders involved in cotton cultivation. Legal and other incentives should be provided
to cotton pickers and growers for actually wearing protective equipment. For that, easily
understandable brochures should be developed targeted at various addressees in regional
languages. The GoP should implement bans on severely toxic substances/products, sanction their
implementation, and explore the potential to reduce pesticide application through Integrated Pest
Management (IPM) and/or organic farming.
     To address the skewed distribution of bargaining power between agricultural workers, their
organizations should be established and strengthened in order to make sure they can jointly voice their
concerns and work for improvement of their working conditions. More vulnerable female agricultural
workers should be targeted in particular.
Politics of Donations
The money pledged by international donors for post-quake rehabilitation and
reconstruction seems fine on paper. The devil lies in the fine print

Abid Qaiyum Suleri
suleri@sdpi.org




International donors have pledged some $5.4bn (£3.14bn) in a donors' conference 19 November, 2005 to
help Pakistan recover from October's devastating earthquake. The figure exceeds $5.2bn Pakistan had
been asking for. The Pakistani demand was based on a Preliminary Damage and Needs Assessment
released by the Asian Development Bank (ADB) and World Bank.
      More than 70 donor countries, financial institutions, and aid organizations attended the conference.
The single biggest donor country was Saudi Arabia, which pledged a total of $573m in grants and soft
loans. The US pledged $510m, including $156m already given. Among other top contributing countries
were Britain, other European Union nations, Japan, Kuwait, Iran and Turkey. The World Bank and the
Asian Development Bank pledged $1bn each, mostly in the form of loans. The Islamic Development Bank
said it would increase its assistance from more than $250m to more than $501m. Nearly 30 countries
extended offers of help, with China pledging $316m and Iran $200m.
      While one is heartened by these pledges for the quake survivors, it should also be kept in mind that
historically, following major disasters only about half of the pledges made by donors have ever
materialized. Another disturbing fact is that approximately 68% of the pledges are loans--although donors
are calling them soft loans. The hard reality is that Pakistan already has $32bn in debt and is paying
billions as interest on these loans. The deepened burden of debt may make the future a bit darker for our
coming generations.
      One would have even agreed to swallow the bitter pill of debts in the name of rehabilitation and
reconstruction, provided it had come timely. The problem with the international pledges is that most of
them are long-term commitments.
      Another significant aspect of the donors‟ conference was its failure to involve Pakistani society at large.
This is because like many other developing countries, there is no culture of national consultation, building
consensus or taking the parliament into confidence before taking decisions of national importance such as
agreeing to borrow from lending agencies. However, even more amazing was the working of donors. It
seems they were so eager to lend that they totally ignored the need for consulting the stakeholders.
This makes it all the more necessary to analyze all the pledges even if they have already been made. Let
us examine the World Bank's commitment first. The Bank announced $470m on October 25, 2005 and
raised it to $1bn during the donors' conference. Of the money that the Bank has pledged, only $200m have
been transferred to Pakistan November 2005.
The break-up of the World Bank pledge is as follows:
1. Supplemental financing of $150m for the Poverty Reduction Support Credit (PRSC): The
      supplemental credit will support the sustained implementation of the PRSC reform program and
      help finance part of the gap in resources incurred as a result of the earthquake.
2. Supplemental financing of $50m for the North-West Frontier Province Structural Adjustment
      Credit II (SAC2): The NWFP SAC2 was the second in a series of three operations to support the
      implementation of NWFP government's Provincial Reform Program. The proposed supplemental
      financing will support the sustained implementation of the SAC reform program, and help finance
      part of the gap in resources incurred.
3. Additional financing in an amount of $100m for 'Highways Rehabilitation Project': The new
      activities include civil works for reconstruction and rehabilitation of earthquake damaged roads,
      which, based on an initial needs assessment, may include some sections of main national
      highways connecting Muzaffarabad, Kaghan Valley and Northern Areas with the rest of the
      country.
4. Additional financing in an amount of $100m for second Pakistan Poverty Alleviation Fund Project:
      The partner organizations and PPAF will use these additional funds to rebuild communities
      through intensive social mobilization (approximately 1m individuals); low-cost seismologically
      appropriate housing (approximately 25,000 units); rehabilitation of 1,500 community infrastructure
      schemes; community buildings; coordination, monitoring and supervision; and technical
      assistance for earthquake resistant structures.
5.   Re-allocation of part of the proceeds of the NWFP CIP II credit in an amount of $22.5m: The
     project will comprise three components: (a) restoration of economic and social infrastructure
     destroyed and damaged by floods and earthquake including restoration of roads; repair and/or
     reconstruction of buildings; repair of water supply schemes and restoration of irrigation canals; (b)
     strengthening of the safety net and disaster preparedness programs; and (c) project management
     and implementations support.
6.   Re-allocation of part of the proceeds of the credit in an amount of $7.5m for North-West Frontier
     Province On-Farm Water Management Project: This project will also comprise the above
     mentioned three components.
7.   Re-allocation of part of the proceeds of the credit in an amount of $10m and additional financing
     in an amount of $30m for AJK CISP: The proposed project will cover three districts of AJK that
     have been affected by the earthquake (Muzaffarabad, Rawalakot and Bagh). The project will again
     comprise the three components, i.e., restoration of economic and social infrastructure, strengthening
     of the safety net and disaster preparedness programs; and project management and
     implementations support.

Even if one is mindful that there can never be perfect answers, it does not answer the question
whether survivors of the October 8 tragedy have any say in prioritizing what is required for their
rehabilitation. None at all, of course. It, therefore, comes as no surprise that the donors and the
government are deciding on their own what is beneficial for the quake-hit areas and what is not.
    The above-mentioned allocations are based on a quick assessment carried out by ADB and the
World Bank mission. Many officials who have visited the disaster-hit areas have commented that they
have never seen the destruction and the access complexities of this magnitude. We are talking of
helping save almost 1m people who are still homeless or un-served, who are now facing the spread of
disease and further illness, even death as the Himalayan winter descends. In return we get the loan
enhancement for NWFP government reforms and on-farm water management as if these reforms will
solve the chronic problem of governance.
                                                                     There is no denying the fact that the
  Another disturbing fact is that approximately NWFP government reforms or on-farm
                                                                 water management are important in
  68% of the pledges are loans--although themselves. But revising allocation of
  donors are calling them soft loans. The hard loans for themis mere eyewash.
                                                                 quake victims
                                                                                in the guise of helping the

  reality is that Pakistan already has $32bn in                      The story of ADB's $1bn support is
                                                                 no different. According to ADB's official
  debt and is paying billions as interest on version, this support will be provided in a
                                                                 number of stages. About $100m of
  these loans.                                                   savings from concession loans from
                                                                 eight ongoing projects in Pakistan has
been re-allocated to the ongoing ADB-backed Decentralization Support Program. These funds will provide
budgetary support for earthquake-related rehabilitation and reconstruction activities.
    ADB's Resident Mission in Pakistan is also reviewing seven ongoing loans in the earthquake-
affected areas to see whether these can be redesigned to address earthquake damage more
effectively. The Multi-sector Rehabilitation and Improvement Project for Azad Jammu & Kashmir is
one such project.
    ADB has set up a special Pakistan Earthquake Fund with an initial contribution of $80m. In early
December, a $300m Earthquake Emergency Assistance project, inclusive of the $80m from the
Pakistan Earthquake Fund, will be considered by ADB's Board of Directors. The project will focus on
transport, power, health, education, governance, and institution-building.
    The remainder of ADB's support is likely to be provided in 2006 in the form of a credit line facility
to ensure that it can be flexibly used to address the remaining high priority needs of rehabilitation and
reconstruction.
    The absence of stakeholders' participation and lack of national consultation on rehabilitation may
turn the process into commercial development in the name of the marginalized and the poor, as was
the case during post-tsunami reconstruction process. The tsunami experience also proves that
coordination, aid utilization, and accountability need to be put on top of the priority list in the
reconstruction process--something that seems lacking in our context.
    It is also appropriate to review the donors' commitments, especially the loan component to
determine its usefulness for quake survivors. There must be transparency and accountability not only
at the level of the recipients‟ end but also at the donors' end. It is important that the terms and
conditions for grant contracts and loans are people-friendly, not simply donor-friendly. This makes the
fine prints of grant contracts very crucial, including how much will go back to the donor country in
money for providing 'technical expertise' and equipment, and how much actually goes to the people in
distress.
     This brings into focus who does what when the money finally arrives and is distributed. It means
we need to ensure the crucial task of aid utilization in a transparent and unbiased manner. The major
challenge is, of course, how the impact of the aid and loans will be realized by the millions of
survivors, living either in tent villages and/or still in the open.
     Also, over-dependence on external donors will further undermine our national sovereignty. It is ironic
that the government has not pledged any donation from its‟ part of the pie. No cuts have been made in
lavish 'entertainment' and protocol budgets, no reduction has been made in overseas trips and no
downsizing has taken place in the flock of advisors and consultants. Mega plans like shifting of the Army
Headquarters from Rawalpindi to Islamabad are still on. Let us realize our collective responsibilities and
begin a meaningful rehabilitation, which should also include rehabilitation of our attitudes and paradigm of
thinking that revolves around dependency on external sources of money.
Domestic Policies and WTO
Before the Southern states begin to fault the WTO, the central concern
for them ought to be domestic policies and the shortcomings in that
regard
Moeed Yusuf
moeed@sdpi.org

While no outright consensus was achieved at the WTO (World Trade Organisation) ministerial
meeting, which was held in Hong Kong in December 2006, members have agreed to continue
talking in the "interest of all".
      On the sidelines of the ministerial talks was violent opposition to the idea of a global trading
regime. It is not the scale of the opposition but the message the opponents conveyed to
policymakers sitting inside the Hong Kong Convention Centre: the WTO regime has attached to it
negative externalities which will force many to lose out in the bid to create a global free-trade regime.
      What is important is the fact that the opposition at the meeting was not a result of any perceived
threat from WTO, but came from groups who have already begun to feel the brunt of the free-trade
regime. This is a stark reality, in total contrast to the perception of those sitting inside the Convention
Centre and who look to the WTO as a means of bringing gains for all. The latter deduction is entirely
flawed.
      Proponents of free trade continue to profess that WTO would bring global benefits by increasing
inter-state economic flows. However, it is absurd for member states to perceive, as some do, that this
automatically translates into a "benefit-for-all" regime. WTO pundits themselves are the first ones to
oppose any such extension of the regime's mandate. The fact is that the WTO is only aimed at
increasing the size of the global economic pie, which could potentially increase the size of the pie for
individual countries. In other words, WTO principally looks at a global improvement in economic flows.
It is virtually silent on intra-national benefits.
      To begin with, while the multilateral trading arrangement might bring benefits to most countries,
there is no guarantee that every member state would gain. More importantly, it certainly does not flow
from the arrangement that such a development would improve the livelihood opportunities (and thus
poverty) of all citizens of the South.
      The first question strikes at the heart of inter-state politics. The most contentious issue that has
prevented trade talks from reaching a consensus is that of market access. The deadlock is largely a
result of power play in international politics. The EU and the US are using their international leverage
to continue protecting their domestic producers while pushing the Southern states to liberalize. The
latter is in no position to force a change in the North's attitude, especially given the imbalanced power
structure. Clearly, tangible movement on the issue of market access lies at the mercy of the North.
The South can only exert its utmost pressure and play a wait-and-see game.
      The second leg of the equation--i.e., benefits translating from the national to the individual level--
directly concerns the Southern governments. Here it revolves around Southern national policies,
which look to ensure benefit-sharing between the rich and the poor. The need for the Southern
countries to ensure an all-inclusive system of benefit-sharing remains as strong under the WTO as
without it. Notwithstanding the South's claims that the advent of the free-trade regime would bring
benefits to all, there is no automatic connection between the two.
      The lack of an effective benefit-sharing mechanism in the Southern countries, misplaced
institutional preferences, and inherent policy biases favoring the influential large-scale producers
ought to be the focus of governments in the South. Were WTO to bring gains at a national scale, there
is every possibility that the influential elite will capture most of it, given the present institutional context
across the South. In fact, were the WTO to manage a level playing field (by resolving market access
and other such issues), the stakes to hijack the "trickle down" and benefit-sharing mechanisms would
be higher.
      As the potential gains increase, two things are likely to happen in an adverse policy environment.
First, large-scale producers are likely to exert the influence that they so often enjoy in the South to
receive most of the benefits. Second, given the necessity of efficient production, the economies of
scale and a slew of environmental and quality standards, large-scale producers with resources at their
disposal would be in a position to adapt more quickly than small-scale producers in the South.
      This could easily result in weeding out the less competitive small-scale producers. Already
literature is emerging, which challenges common wisdom by shedding pessimism on the ability of
small producers to gain from market-access opportunities. The opposition from the Korean farmers
and other such groups in Hong Kong is evidence of such a development.
     If the South's policies are not altered to cater to the interests of the small-scale producers, there
could be serious repercussions. Trade pundits are increasingly looking at SMEs (small and medium
enterprises) as the engines of economic growth within countries. Given their contribution to the GDP
and their employment-generation potential, Pakistan itself has laid high priority on SMEs in its Medium-
Term Development Framework. If most of the SMEs were weeded out--in case of agriculture, this would
be small farmers--it would severely impact employment levels within the country, which would
automatically translate into higher poverty levels. While trade skeptics stop here, the chain needs to be
extended to include all social impacts associated with rising poverty levels, the most obvious one being
increased crime and, perhaps, more recruits for extremist interests.
     The point is that the WTO, at best, will bring gains for national economies. It will not alter the domestic
policy structures of the countries, which need to be in place if the benefits are to trickle down to the poor-
est. The onus of correcting domestic policy biases and give incentive to small-scale producers in a free-
trade regime is entirely on the Southern states. There is no reason for the governments in the South to wait
for the creation of a level playing field before they would take such measures. By the same token, one
must not link any failure of the small producers under the WTO to the regime itself. The central concern
ought to be domestic policies and the shortcomings in that regard.
Ways to Protect Traditional Knowledge
Mehnaz Ajmal
mehnaz@sdpi.org


The current literature on Intellectual Property Rights, presents two approaches used in the world to protect
traditional knowledge. One is positive approach and the other is defensive approach.
     The positive approaches of protecting Traditional Knowledge talk about the systems in any country or
region, either established by themselves or adopted from other countries‟ model. This approach requires
sound technical capability as well as commitment by the countries. As this is a new area, therefore, sparse
work has been carried out so far. Many have developed and proposed the systems or trial but there is no
concrete model. On the other hand those who are the allies of defensive approaches talk about the rights
of countries against the monopoly of the multinationals in exploiting traditional knowledge.
     Supporting the defensive approach to protect traditional knowledge, in this article we present the
concept of disclosure of origin of genetic resources, associated traditional knowledge, and the data-base
compilation of traditional knowledge.

Disclosure of Origin
The disclosure of origin postulation lays out a fair and equitable benefit-sharing related to genetic
resources and traditional knowledge as required by the Convention on Biological Diversity. The proposal
related to disclosure of origin has three forms, i.e., weak, medium and strong:
1. The weak form encourages the disclosure but does not bind it with the grant of patent
2. The medium form makes the disclosure of origin mandatory
3. The strong forms goes deep into the specification of patents, like certification of origin, information
     about the genetic resources and traditional knowledge where acquired, conformity with Access to
     Genetic resources and Benefit Sharing (ABS) regulations and Prior Informed consent (PIC).

The compliance or incompatibility of the disclosure of origin with TRIPS agreement depends upon the
intensity of the three forms. The weak form does not put any compulsion on the contracting party or
country, while the medium form can question the invention of the genetic resource and traditional
knowledge. The strong form leads towards conflict if the patent application can be rejected on the basis of
absence of any requirement or compulsion on the submission of the documents and linking it with the
other requirements. Some people are of the view that such requirements are a violation of TRIPS
agreement, but in actual fact these requirements require the revision of TRIPS agreement according to the
needs of the countries. Alternatively, these requirements could be introduced outside of the search and
examination process, as administrative measures.
     The medium from that makes the disclosure of origin mandatory could operate quite well for health
issues. For instance, in the pharmaceutical industry it is easy to find the source of the single compound
used to prepare a new drug for a disease, but it is very difficult in plant varieties, which can be patented in
some countries. The genetic material may come out of different sources, some of which may no longer be
identifiable because of lack of documentation and the length of time between its‟ acquisition and its‟ use in
breeding programs. There may be certain other objectionable or unclear reasons, e.g., the different
sources of genetic material; the genetic material produced through conventional breeding methods;
unorganized farming communities; partially developed farming systems; and identification of indigenous
communities and their truthfulness.
     Keeping in view the above facts and ambiguities, careful policies for development and their practical
implementation are the need of the hour.

Inventories and Database on Traditional Knowledge
The inventories and database on traditional knowledge in many countries, like India, are strongly
promoted. The main aim is to make available information not only to patent examiners but also disclose it
to the public domain. But the usefulness of these databases is open to discussion, depending upon the
grant of controversial patent, chemical constitution of the genetic resources of different areas, difference
between the information of the new invention and the traditional knowledge mentioned in the databank or
inventory of any specific area. Bio-piracy is the most dangerous threat to these inventoried databanks.
     In the context of availability of information, national and regional laws vary with respect to how
information or material in the public domain should be presented in order that it constitutes novelty
defeating prior art, because due to the lack of novelty, patents on isolated compounds obtained from
medicinal plants can be challenged.

Recommendations
 There should be national laws, which can determine and prevent the misuse of traditional knowledge
   and free to penalize the felon and take compensation.
 The national law should have capacity-enhancement programs to empower communities to fight for
   their rights.
 There should be provision for documentation of traditional knowledge, proof of origin of genetic
   material, and prior informed consent in the national law.
 There should be ways for the protection of heritage.
 Communities or holders of traditional knowledge should be capacitated either to engage in commercial
   activities or to ask for benefit-sharing.

Conclusion
In the light of approaches for protecting traditional knowledge mentioned above, there is a need to develop
mechanisms to protect the rights of holders of traditional knowledge. The mechanisms devised must be
effective at all levels especially at the local/domestic level. This will ensure, protection of traditional
knowledge through registers and data banks to avoid their misuse. Moreover the national authorities
should provide the certification of origin, that the source of origin is disclosed and the prior informed
consent of the stakeholders has been taken for the commercial utilization of traditional knowledge.
In Retrospect
Campaigns and Talks
Conflict Situation in Balochistan
February 13, 2006

The speakers criticized the unwillingness of the government to resolve the Balochistan crisis.
They demanded an immediate end to the ongoing military operation in Baloch tribal areas, a
political settlement of the crisis through initiation of an open and meaningful political dialogue,
and a balanced and impartial constitution for the province that safeguards the rights of the local
people.
     Syed Shamsuddin of Human Rights Commission of Pakistan (HRCP) presented the findings
of HRCP‟s latest report on the situation in Balochistan. The report revea led that the military action
in Baloch tribal areas including indiscriminate bombings had resulted in a large number of deaths.
Deep resentment and anger had been prevalent in the local communities along with an
overwhelming sense of fear. “The present situation calls for an open dialogue and a political
settlement that also takes into consideration important issues such as provincial autonomy,” he
said. He further stated that the civil administration of Balochistan currently stood subservient to
the military and there was a dire need to discourage this malpractice.
     Dr Ishaq Baloch of National Party stated that the National Party was a true representative of
not only the educated middle class of the country but also of the different ethnic groups. He
declared the situation in Balochistan very similar to that of East Pakistan. He said that over the
years, Balochistan had undergone five operations, and the insurgency still continued because the
federation does not exist in its true sense. “Because of continue d discrimination against the
province and the ineffectiveness of the political system, the people in Balochistan have started to
loose confidence in democracy and political parties,” he said. His demand included initiation of a
meaningful political dialogue and a balanced and impartial constitution that could safeguard the
rights of the local people.
     Ghulam Mustafa Baloch of Strengthening Participatory Organization (SPO), Quetta lamented
that the federal government had deprived the local people of Balochi stan from controlling their
own resources by labeling them as incompetent people who were also incapable of making their
own decisions. He said that the government had targeted three tribal chiefs of Balochistan for
their alleged anti-development stance. However, the state of majority of the people living under
the rule of pro-government/liberal tribal leaders remained as miserable as the former. He also
endorsed the demand for a balanced constitution.
While responding to the questions of participants of the seminar, the speakers strongly
condemned the colonial attitude of the federal government and declared it a contributing factor to
the crisis situation that prevails in Balochistan.

Causes and Consequences of Margalla Towers Tragedy: Lessons Learnt
February 6, 2006

The speakers condemned the Capital Development Authority (CDA) for showing criminal
negligence, which led to the collapse of Margalla Towers and the resultant loss of precious
human lives. They recommended the need for better legislation for implementation and
enforcement of building codes, verification systems for high-rise buildings, research for seismic
resistant buildings and facilitation of independent investigations in the tragedy.
    Dr Farid Midhet of Asia Foundation presented a factual account of the Margalla Towers
tragedy on behalf of the Margalla Towers Residents‟ Society. He declared CDA and the builders
(CCC Associates) responsible for the loss of lives, as they did not pay any heed to numerous
complaints lodged by the residents of Margalla Towers about its poor construction. Sharing the
evidence of poor designs and faulty construction of the building, he said that CDA had a
suspicious relationship with CCC Associates, which was why the complaints of the supervising
engineers Habib Fida Ali Associates were ignored and the complainants were eventually
dismissed.
    He further said that the ground acceleration was 0.05g in Islamabad, which was very low as
compared to the ground acceleration of 0.8g experienced in Muzaffarabad and Kashm ir. “This
clearly shows that Margalla Towers did not collapse because of the earthquake,” he stated. He
strongly criticized the CDA officials for doubly victimizing the residents of Margalla Towers by
calling them illegal occupants. “CDA was making an irresponsible effort to shift the blame by
trying to disassociate itself from the Margalla Towers project,” he added. He lamented that CDA
even failed to provide immediate rescue and relief to the survivors and to comply with the orders
of the Supreme Court in letter and spirit. He proposed formation of a body in Islamabad to protect
the rights of citizens. He also demanded that CDA should be transformed into a more
accountable and democratic institution.
     Dr Shafqat Shehzad of SDPI highlighted the fact that despite the Supreme Court‟s order to
fully compensate the residents of Margalla Towers, CDA had only paid two months‟ rent to the
affectees. She stressed upon the need for better legislation for implementation of building codes,
verification systems for high-rise buildings and research for seismic-resistant buildings.
     Other members of Margalla Towers Resident Society (MRTS) also shared their experiences,
including Saad Mazhar who lost his entire family in the tragedy. While responding to the
questions of the participants of the seminar, Dr Asim Masood, President MRTS, said that the
decision of the Supreme Court regarding the tragedy of Margalla Towers held immense
significance for prevention of future tragedies, as it would set a precedent.

Drinking Water Vision-2030 for Rawalpindi
January 30, 2006

Experts warned of severe water crisis in Rawalpindi in the near future if small dams such as
Cherah and Daducha on Soan and Ling rivers, respectively, were not built and leakages, wasting
50% of water, not plugged. They asked the government to immediately start de-silting of Khanpur
dam's water channel since the channel had not been cleaned for years and the filtration plant at
the dam was unable to provide water to the twin cities of Rawalpindi and Islamabad a s per its
maximum capacity.
     Dr Isa Daudpota, an environmentalist, said Khanpur dam was built on a wrong site by Ayub
Khan‟s government. In 1986, the Executive Committee of the National Economic Council
(ECNEC) adopted an alternative route to provide water to the twin cities from this dam, which did
not prove to be a useful alternative. He said that the water supply from Khanpur dam to the twin
cities involved three different options in the past, but ECNEC did not approve the feasible and
perfect option of Margalla water tunnel, which was even strongly recommended by the CDA and
JICA. “The Margalla water tunnel project had an estimated cost of Rs320m in the year 1985,
which can be doubled to Rs640m in recent times due to the inflation factor; but still it wa s a
feasible project with a less operational and maintenance cost to existing project of water supply to
the twin cities from Khanpur dam,” he said. He added that the proposed supply of water to the
federal capital and Rawalpindi from Jehlum and Indus rivers was no practical solution to the
water crisis in the making. He asserted the people were given the wrong impression that there
was too little water in Khanpur dam. The dam's spillways had been opened 18 times during the
last year alone, which showed that water availability was not a problem but how to suck the water
up from 400 meters. He lamented that neither Punjab nor the NWFP cleaned the channel of
Khanpur dam, which had made the filtration plant inefficient.
     Arshad Abbasi of SDPI said that at present Rawalpindi had a population of 1.8m and with the
present growth rate it would touch 4m by 2030. Now the city required more than 36mgd water,
however, by 2030 the water requirement would also increase. He said that two small dams, i.e.,
Chirah dam on Soan River and Daducha dam on river Ling could be easily built in Rawalpindi to
meet its future water requirements. Both the dams, he said, were unavoidable, if the government
wanted to avert the long-predicted water crisis in Rawalpindi. He said installation of water meters
could also help save the water from being wasted. At present, he said the Water and Sanitation
Agency (Wasa), Tehsil Municipal Administration (TMA), and Rawalpindi Cantonment Board
(RCB) charged fixed rates.
     Participants of the seminar also discussed water pollution in Rawal Lake and the provision of
unsafe drinking water to the citizens of Rawalpindi. They said that water charges should not be
increased; instead, the water agencies must improve the quality of potable water aimed at
checking water-borne diseases that were now common in Rawalpindi. They said that the newly
laid faulty pipelines in Rawalpindi should be rectified. More than 50% of the city's water wasted
through leakages in the pipelines, which was a main reason for the mix ing of sewage with water.
In developed countries, there was very little or no leakages in the pipelines. However, Pakistan
should at least follow the Asian model where only 8-12% water wasted through leakages.

Medical Negligence in Pakistan
January 16, 2006

Dr Sohail Hashmi of PMDC said that Pakistan Medical and Dental Council (PMDC) lacked the
authority to deal with the cases of medical negligence. According to him, registration of senior health
professionals had been cancelled on account of medical negligence but the process was very lengthy.
PMDC had revised its code of ethics (which was developed in 1978) to include modern as well as
religious concepts. “However, PMDC is not responsible for the entire health community including
homeopathic doctors, tabibs, opticians, lady health workers, dais, quacks etc,” he clarified. He
recommended formulation of a national policy for patient protection and regulation of appropriate
health services delivery.
     Mr Lal Zameer narrated the incident of his wife‟s death that happened due to negligence of a
gynecologist. He said that his loss was irrecoverable, yet he had filed a case through The Network for
Consumer Protection so that such incidents could be avoided in future.
     Referring to Mr Zameer‟s case, Mr Batish Mehmood Tipu of The Network for Consumer
Protection said that it was not only the patient who suffered due to medical negligence, but the entire
family of the victim had to go through mental trauma. “Their agony was multiplied when their
complaints were brushed off without any action,” he added. He said that numerous cases of medical
negligence went unreported because of lack of accountability. He recommended that public interest
lawyers should also be familiar with medical terminologies in order to deal with such cases. He urged
the government to ensure registration of all medical practitioners as well as medical institutions in
order to make them accountable.

Appraisal of Noise Levels and Noise Annoyance in Silence Zones of Rawalpindi and Islamabad
January 2, 2006

Dr Talib Lashari of Ministry of Health condemned the high levels of noise in silence zones by
declaring it a serious concern for public health. He added that research and legislation regarding
noise annoyance had been very limited despite the fact that this area also pertained to the Millennium
Development Goals (MDGs). He also appreciated the efforts of the speakers to draw attention
towards an important issue and urged adoption of a multi-sector approach to deal with it. He added
that the seminar‟s recommendations would be forwarded to the National Health Policy unit of Ministry
of Health for necessary action.
     Saira Bano of Fatima Jinnah Women‟s University discussed the levels of noise in the hospitals of
Islamabad in which she particularly listed the negative impacts of noise annoyance on human health
including loss of hearing, stress, sleep disturbance, tiredness etc. She lamented that Pakistan
Environmental Protection Agency had not specified any standards for noise levels in the silence
zones. According to the findings of her study, major sources of noise include traffic, hospital visitors,
hospital staff, paging etc.
     Nazima Shaheen of SDPI presented her study that focused on appraisal of noise level in
hospitals of Rawalpindi. Her study indicated that aircrafts, traffic and attendants were the major
sources of noise for the patients. She concluded that noise levels of casualty wards were higher than
that of any other location. Her recommendations included public awareness raising, incorporation of
speed barriers and installation of signboards near hospitals.
     Maria Khalid of Pakistan Institute of Nuclear Science and Technology (PINSTECH) discussed the
high noise levels in schools and universities of Rawalpindi/Islamabad. She said that the high level of
noise in schools negatively affected the academic performance of children along with posing serious
health concerns. While discussing the role of noise barriers, she suggested that tree plantation was
an effective way of noise reduction.

Picking and Pesticide Poisoning: Working Conditions of Cotton Pickers
February 20, 2006

For cotton pickers shouldering Pakistan‟s most important industry, decent working conditions
including higher wages and lower pesticide poisoning were demanded.
     Naila Hussain, a Lahore-based environment and development researcher, shared the findings of
her research on working conditions of cotton pickers in Southern Punjab. She said that there had
been a massive increase in the use of pesticides that posed serious threats to the health of the cotton
pickers. She strongly criticized the multinationals for strategizing aggressive marketing of pesticides
without highlighting any information related to their ill effects on human health. She stated that eye
infections, skin irritation, respiratory diseases, including asthma and kidney problems, were common
among cotton pickers due to their high exposure to poisonous residues. “Lack of awareness and
poverty exacerbates the situation,” she added. Her recommendations included political will and
coordinated effort to implement farmer-friendly policies and practices such as availability of toxicity
test facility in cotton growing areas. She strongly recommended a ban on certain pesticides such as
DDT.
     Dr Karin Astrid Siegman of SDPI presented a comparative analysis of the working conditions of
cotton pickers before and after the end of quota restrictions in Textile & Clothing (T & C) trade. She
explained that before the quota expiry, women workers faced lack of alternative income sources and
low bargaining power because of poor education, poverty, gender discrimination and labor surplus. “In
addition, they faced sexual harassment and pesticide-induced health problems,” she said. “The WTO
Agreement on Textile & Clothing (ATC) phased out the quota system governing T&C trade in January
2005, however, no positive change took place in the working conditions of cotton pickers,” she added.
She stated that the same low wages prevailed and were accompanied by price hike and increased
pesticide use. Her recommendations included awareness-raising of cotton growers, pickers, pesticide
companies, and government officials along with the application of protective/labor laws for workers in
agriculture sector and incentives for contamination-free cotton such as better wages for pickers.

Development versus Environmental Concerns: Removal of Trees in Islamabad
January 23, 2006

The speakers and participants urged the Capital Development Authority (CDA) to stop removal of
trees in Islamabad and to prioritize the development needs of the city. The Capital Development
Authority was in the dock and its official from Environment Directorate had to cut a sorry figure for
anti-tree drive of the civic body. The speakers and participants pointed out that anti-environment
activities in the city and Margalla Hills were against the Master Plan as well as Margalla Hills National
Park legislation. The CDA plans such as to develop golf courses at Fatima Jinnah Park, Margalla Hills
and Jinnah Super Market also came under severe criticism during the seminar. The participants
demanded an efficient mass transit system to deal with the traffic issues instead of relying solely on
road expansion, as that would eventually lead to deterioration of the environment and loss of
biodiversity in the city.
     Wajahat Latif of Margalla Hill Society said that removal of trees for expansion of roads was a
short-term solution to the problem that would prove inadequate in the long run. He emphasized the
need for effective traffic management to deal with traffic-related problems. Strongly opposing the
construction of steel/concrete structures in public parks, he demanded citizen's participation in the
decision-making process. He said that we should not go for ill-conceived projects like golf courses in a
city, which could not provide shelter to dwellers of Katchi Abaadis. He said that his Society had filed a
lawsuit against construction plan at Dar-e-Jangla in the Margalla Hills National Park but awaited
hearing before the Supreme Court.
     Aurangzeb Awan of CDA said that the CDA was removing trees not just for the expansion of
roads and construction of buildings but also for getting rid of paper mulberry trees that cause allergy
to residents of the city. However, no trees were being removed from designated green belts, he
maintained. He claimed that the CDA also planted over 23m saplings and consultations with civil
society members took place before the removal of trees. He maintained that dualization of roads
saved citizens traveling time and helped to control emission of pollutants from vehicles, the latter
being an environmental concern as well.
     A journalist observed that Environment Directorate of the CDA was a helpless body before its
Road Directorate. He questioned Aurangzeb Awan of CDA Environment Directorate why the trees in
front of Presidency Colony were cut when enough space was available for the dualization of Barri
Imam Road. Mr Awan said that those trees were not part of the planning. He could not give an answer
to the question why three rows of the trees were implanted at a space about which the authority knew
it would be used for the road. Trees take decades to grow while roads take a few years to get broken
and re-carpeted, he said.
     A participant from an NGO criticized CDA for not carrying out Environment Impact Assessment
(EIA) or Initial Environment Examination (IEE), which were obligatory under the law for projects like
construction of a hotel at Pir Sohawa. He said that since the induction of Kamran Lashari as CDA
chief, Islamabad had a lot of flowers and beautification but at the same time, trees were cut in the
name of development and commercialization of green belt was taking place. Another participant said
that such acts were performed for political and economic reasons, as cutting trees and building roads
generated commission for bureaucrats of the authority. Professor Naeem Khan shared the details of
the trees that had been cut in sector F-7/3 and Blue Area for the purpose of beautification of the city
and construction of a food park, respectively. However, quite contrary to the purpose, the removal of
trees had resulted in sewerage problems, which in turn, posed serious threats to the public health.
SDPI Center for Capacity Building

In line with its mandate, SDPI Center for Capacity Building (CCB) provides high quality training to the
public, private and NGO sector organizations and individuals to strengthen institutions and build capacity
for sustainable development. During January-February 2006, CCB conducted the following trainings:

1.      Monitoring and Evaluation of Projects January 3-5

An objective and meaningful system of monitoring and evaluation facilitates the success and sustainability
of projects. The participants were keen to learn the modern tools and techniques of monitoring and
evaluation. Participants learned to use MS Project software to monitor project activities. They reviewed
their existing monitoring and evaluation formats and incorporated improvements. The workshop objectives
were to:
      understand the principles and procedures for effective project monitoring and evaluation;
      formulate and use the logical framework analysis to monitor and evaluate projects;
      use work breakdown structures and MS Project to monitor project efficiency;
      improve their ability to gather, manage, and communicate project information; and
      learn methods to evaluate project effectiveness and impact.

2.   Environmental Impact Assessment of Development Projects
     January 24-26

EIA aims at assessing environmental impact at an early stage of project planning, design and development
and building into the project alternative ways and means to mitigate the adverse effects. An EIA results in
environment-friendly and cost-effective projects. It is an essential part of project design and appraisal.
Currently, it has been emphasized at many private and public fora that there is a dire need for institutional
and personnel capacity-building in this area.
     Participants from national, international and foreign agencies, industrial sector, academia and
corporate sector attended the training. They also carried out an EIA of a development project of proposed
Islamabad Railway Station.
     The overarching aim of this training workshop was to enable the participants to build their capacity to
integrate environmental concerns in project proposals. The specific objectives were to enable the
participants to:
 learn the principles, skills, procedures and practices of integrating environment through EIA;
 become aware of the legal and regulatory obligations of integrating environment in development
     projects;
 familiarize themselves with the techniques of getting public participation and integrate socio-economic
     aspects in development projects; and
 enable the participants to conduct an EIA study for a development project.
3.   Project Proposal Development
     February 14-16

                                                Organizations that depend on external grants to achieve
                                                their objectives have to apply various sources to obtain
                                                project funding. However, most organizations are often not
                                                aware of the basic requirements of a project proposal. As a
                                                result, a project proposal may be rejected or unnecessarily
                                                delayed, because it does not meet the required criteria.
                                                This workshop was designed to help participants to
                                                understand the principles and formats of writing an
                                                effective project proposal. It provided the trainees an
                                                opportunity to prepare, present and defend a project
                                                proposal.
     The training workshop was designed for managers involved in project planning and management,
social and infrastructure development, representatives of national and international NGOs, academia,
government officials and policy and decision-makers.
At the end of the workshop, the participants were able to:
      understand the components of a project proposal;
      apply the project planning tools in writing proposals;
      develop a proposal according to the required format;
      apply appropriate writing skills for better proposal quality; and
      present and defend their proposals.
Recent Publications

Anatomy of a Peoples’ Rights Movement: A Case Study of the Sarhad Awami
Forestry Ittehad (SAFI)
By Shaheen Rafi Khan, Moeed Yusuf (SDPI) and Riaz Ahmed (SUNGI)
Working paper series # 103; pp. 16; Price: Rs. 60.00

Abstract
The Sarhad Awami Forestry Ittehad (SAFI), arguably, represents the only formal attempt to engage in forestry
reform advocacy and political activism. Given the importance of developing an understanding of the factors that
may lead to the success of peoples‟ movements in Pakistan, we conduct a careful evaluation of SAFI‟s impact
on the forestry reform process and, in general, in terms of sustainable forest management.
      SAFI is active in the Malakand and Hazara divisions of NWFP, and in the Southern District and Kurram
Agency in the Federally Administered Tribal Areas (FATA). The rapidly eroding capability of the State to manage
its forests amicably and its consequent impact upon communities and the environment provided the backdrop
for an organization like SAFI.
      SAFI emerged with two broad objectives. The first was to mobilize community resistance against the
excesses committed by the large forest owners, the contractors and the forest department. The second objective
was to convert such mobilization into a critical mass for policy advocacy. SAFI‟s successes can be assessed at
three levels: policy advocacy, organized resistance and management interventions. In terms of policy advocacy,
SAFI has created widespread awareness about the forestry reforms, engaging with communities and other
relevant stakeholders in consultations and discussions. SAFI also conducted successful organized resistance in
Hazara and Dir-Kohistan to support the cause of the disempowered communities. It has also made
management interventions bringing the realization among public functionaries that partnership with communities
offers prospects for sustainable management of forests.
      SAFI‟s experience provides valuable lessons for broader peoples‟ movements in the country. The
organization‟s experience underscores the need for such movements to involve an extremely broad set of
stakeholders in consultations. It further highlights the need for a sufficiently large, formally trained membership
base, especially if a movement draws upon volunteers as SAFI does. Finally, given the nature of such efforts,
the issue of financial sustainability must be addressed by diversifying income sources so that the movement is
not solely dependant on donor support.
What Comes After the Quota Went? Effects of and Responses to the ATC
Expiry
By Karin Astrid Siegmann and Atif Nasim
Policy Brief series # 21; pp. 19; Price: Rs. 60.00

Abstract
The global environment after the expiry of the quota system in textiles and clothing (T&C) trade poses formidable
challenges to human development in Pakistan. Increased quality and price competition in the post-ATC scenario
provides an opportunity for some segments of the T&C sector – but a threat to the most labour-intensive ones.
As quality and quantity of employment were largely ignored factors in the preparations for the Agreement on
Textiles and Clothing‟s (ATC‟s) abolition in Pakistan, potential job and wage losses are feared, in garment
manufacturing in particular. Unskilled and female workers are most vulnerable.
     Challenges also provide the opportunity for change. The following recommendations are put forward in this
policy brief:
 Skills improvement in both skilled and unskilled occupations in the T&C sector should be undertaken by
     government and industry. This would reduce the vulnerability of these occupations to adverse effects of
     structural change, and at the same time enhance the competitiveness of the T&C sector.
 Likewise, the implementation of core labour standards at the national, regional and global levels would
     protect, if not improve, working conditions for millions of workers and provide a more level playing field for
     competition in the post-quota era.
 Mitigation measures should be implemented as soon as possible for vulnerable workers who have - or might
     - become victims of structural change in the T&C industry.
 In these efforts, a focus on women workers in skill development and mitigation measures is required. As
     unskilled workers, women face more precarious working conditions and fewer job alternatives. Very few
     highly qualified and skilled women enter managerial positions, and this lack is another factor in depriving the
     country of development opportunities.
 Awareness should be raised amongst cultivators and pickers about the health hazards associated with
     pesticide application. Incentives to reduce cotton contamination should be provided to cotton growers in a
     manner that can be passed on to female pickers. Such measures would improve working conditions and
     product value-addition at the same time.
 Broadened and strengthened collaboration between workers, employers, and the Government is necessary
     to reach these objectives.
 Overall, social development in Pakistan needs to be emphasised. Investment in, for example, health and
     education, benefits human development directly, but is also a pre-requisite for more competitive and
     sustainable industrial development.

				
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