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March 29, 2020

Close quarters: Safety, health and rising unemployment

Business

March 29, 2020

LAHORE: Operating industries in the current pandemic is extremely risky as labour intensive industries like garment and knitwear require close interaction between workers, which puts them at risk of coronavirus transmission. The domestic and global demand for goods and services has also plummeted. One appreciates the concern of the prime minister for the daily wagers, but who will look after the regular workers of the industries. The government should not feel satisfied on the promise of many industries that they would not fire their workers.

It is true that they are giving their workers marching orders and have sent them on forced leave. Those workers who have not utilised their sanctioned leave have been granted leave with pay, and those who have utilised their sanctioned leaves have been granted leave without pay.

Legally, this looks like a fair decision, but morally this is devastating for those who would not get any salary during leave. We all know that majority of industrial workers utilise most of the leaves allowed to them under the labour laws. Very few keep these leaves for rainy days.

This means that the workers on leave without pay are at par with the daily wagers who would not be earning during the lockdown period. No resolution of this dilemma is in sight in the absence of a coherent policy and national consultation.

Still the apparel and knitwear exporters have not closed down their shops because of fear of spreading the disease. They have in fact been asked by their buyers to put on hold all the orders that have not been dispatched.

They have no choice and resources as well to look after all their workers. In fact, they are sitting on huge ready to deliver export consignments and larger quantity of inputs that they would not be able to turn over till the global situation becomes normal.

At the domestic front, the uptake of most non-food products has nosedived. Moreover, due to nationwide lockdown, the disposal through their outlets in the markets has also been stopped.

So they are also sitting on huge inventories in their premises, besides even higher quantity of unsold stocks in the market. This goes for television sets, air conditioners, microwave ovens and all other home appliances and electronic gadgets.

The unstitched cloth and readymade garments sale in domestic market has also stopped. These industries therefore have no option but to temporarily close down their units.

Again those having exhausted their sanctioned leave would have to live without any earning. Some industries have in fact also fired number of their workers as they are not hopeful of restarting their units when things get normal, unless they are provided working capital by the banks.

Banks we all know are not interested in broke clients particularly when the state is their largest buyer. Some of their treasury bill market (about Rs460 billion or $3 billion) was captured by the foreign funds in recent past, but as they flee that market is again coming back to the local banks.

The pharmaceutical firms in Pakistan both domestic and multinational are operating on sophisticated technology and have the capability to operate in a germ free atmosphere. These firms would continue to operate, but the demand of many medicines they produce has waned and demand for coronavirus related drugs has multiplied so they will have to readjust their manufacturing plans.

Retrenchments in this sector are not expected. But we cannot say this for the automobile sector that was already in deep trouble before the attack of the deadly virus.

Still, there was some production and the industry was hoping of operating at little above the truncated production. However, now auto production has come to a grinding halt.

This industry including the auto component makers employs over 250,000 workers. Barring around 15,000 to 25,000 workers, the jobs of all others are at stake. At least these workers are not going to earn anything till the normal industrial operations resume.

Most of the food industries are operating normally. Wheat flour, edible oil, sugar are in great demand. But the demand for poultry is waning with every passing day. This is evident from the steep decline in poultry meat rates.

The dilemma for the poultry sector is that its production cannot be stopped midway. Around, 30,000 to 100,000 birds are reared in closed sheds protected from outside diseases.

They need 24/7 power to keep birds alive. A five minute power cut off kills the entire stock. The poultry farmers bring in millions of mature birds every day.

They are constrained to complete the process to salvage whatever they can in the end. This sector is in trouble and is closing down sheds as soon as a cycle gets mature. The workers are then fired. All this is adding to unemployment in a big way.