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Pakistan to Join ILO’s Better Work Program as it Commits to Improving Labor Standards

Pakistan is ready to join Cambodia, Vietnam and Bangladesh as a member of Better Work six years after the pro-labor program turned away the South Asian nation due to lack of capacity, Pakistan Textile Exporters Association chairman Khurram Mukhtar announced last week.

Launched by the International Labour Organization and International Finance Corporation in 2006, the initiative works to improve labor standards and boost competitiveness in the global apparel supply chain by providing practical assistance to factories, demonstrating the business benefits of decent work and rallying the influence of leading brands and retailers.

Pakistan’s garment industry suffered a blow in 2013 after a catastrophic factory fire, which killed 262 garment workers the previous year, prompted the Walt Disney Corporation to suspend its sourcing from the country, along with other “high-risk” locales such as Belarus, Ecuador, Venezuela and a post-Rana Plaza Bangladesh.

“After much thought and discussion we felt this was the most responsible way to manage the challenges associated with our supply chain,” Bob Chapek, president of Disney Consumer Products, said in a statement back then.

Pakistan had scored just 19 points in the World Bank’s world governance index (WGI), or six points below the threshold Disney employs as a benchmark for its Permitted Sourcing Countries.

“When Disney pulled out, it gave us two options: improve our WGI standing or join the Better Work program,” Mukhtar told Dawn, Pakistan’s leading English-language newspaper.

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Because Better Work “had more candidate countries than it could accommodate,” however, Pakistan’s entrée into the program was held back. It’s poised to join this year, however, with funding provided by the Export Development Fund.

If the nation is determined to overhaul its textile sector, it will not be a moment too soon. A recent study conducted by the Consortium for Development Policy Research on behalf of the Pakistan Business Council concluded that Pakistan’s garment sector is “grossly underperforming relative to its potential” because of a slate of impediments, including higher production costs, an overvalued currency and export tariffs that restrict market access.

The country’s share of the global export pie is far smaller than those of its competitors: 1.1 percent compared with China’s 32 percent, Bangladesh’s 7.7 percent, Vietnam’s 5.9 percent and India’s 3.8 percent.

“Pakistan was a leader among industrializing countries in the 1960s but unlike the East Asian economies, it failed to take advantage of the window of opportunity created by globalization that gathered momentum in the ’70s and beyond,” the study noted. “However, extricating the economy from this trap is possible given the potential opportunities that exist for a dynamic sector like ready-made garments.”