In the wake of CPEC, manufacturing needs job creation more than ever

LAHORE: Since literacy rate in our country is low, the need of manufacturing jobs becomes even more important because they provide opportunities to rookies to rise on the economic ladder by honing their technical know-how without having diplomas or university degrees.

The world over, it is said that never let a novice to do an expert’s job, but in our country it’s the other way round. Almost all the unschooled technical workers get started by picking up the tools, sorting out nuts and bolts of a trade hands-on under the watch of an experienced expert, who had himself acquired his skills similarly from another mentor.

The ustad-shagird (expert-apprentice) training arrangements, common in our roadside workshops, are also a norm in the manufacturing sector, where new entrants assist experts to acquire workmanship skills.

That’s why despite shortage of technical/vocational training institutions the apparel producers continue to inject fresh blood into the sector through in-house training. Manufacturing is different from services as far as job security and growth opportunities are concerned.

The last one decade has been harsh on manufacturing as it has seen more job losses than creation. Greenfield projects have been rare but hundreds of small and big manufacturing facilities closed down in the period. This erosion has had extremely adverse effects on the economy—and on the prospects of workers in general. Manufacturing jobs, the world over provide more benefits to workers with higher overall compensation than others.

In the last five years most of the jobs were created in services sector, particularly in construction, where work is temporary. The job ends with the project. The job location is also not permanent. Workers have to travel and stay in the cities where the projects are underway. There are no benefits like leave or social welfare as almost all the workers are on contract.

Those who work in manufacturing enjoy a settled life. Most of the similar industries are established in the same cluster. So even if a worker has to change the job, he does not have move to out of his domain.

Workers are permanently attached with the manufacturers and enjoy all social benefits mandatory under law. They get social security and are entitled to pension. Some manufacturing facilities provide subsidised meals, daycare centers, and free medical treatment for their families.

On the contrary, services sector as a whole does not create opportunities for workers. Most of this sector provides employment on contract basis that deprives the workers of fringe benefits available to permanent workers.

They have to toil all their lives to earn living and are finally forsaken by their employers when they leave the job. They rarely move up the ladder and in many cases become redundant when services of their skills are no longer required. The job security available in manufacturing is nowhere to be found in services.

The China-Pakistan Economic Corridor (CPEC) has provided an opportunity to the state to revamp its manufacturing sector policies. There are several special economic zones that have been identified along the CPEC route.

The government should develop one of these zones exclusively for exports. It should be a free economic zone allowing import of any textile material free of duty.

The zone should be completely sealed from the rest of the country. Let the textile entrepreneurs enjoy a free hand and import raw materials and accessories at zero duty. This way they would be able to import special fabrics and enlarge their export product base.

Whatever they produce should be exported. The foreign investment would follow in big way if the free economic zone is handled prudently. It will help protect the country from turning into a trading hub serving others. The size of our population demands that we encourage manufacturing instead of trading or services.

The tendency to shift from permanent to contract workers is gaining ground with a decline in manufacturing sector’s share in the Gross Domestic Product (GDP). This has created job uncertainty resulting in lower productivity.

Permanent workers are in the interest of the manufacturers as their productivity continues to increase with experience and sometimes they prove to be more innovative and enterprising than university-trained engineers.