Understanding productivity in the Pakistani garment sector: Comparisons with Bangladesh

Textiles account for over half of Pakistan’s exports, with knitted and sewn products more than half of the textile exports. Data from the Ministry of Commerce indicate that exports of RMG and knitwear products increased by 12% and 6%, respectively, between FY 2012 and FY 2013.

Pakistan faces an opportunity in these sectors as increasing wage rates in China lead buyers to look for alternative source countries. Also, the European Union has recently granted Pakistan GSP Plus status. In addition, the government of Punjab has recently procured a large area of land outside of Lahore to build Apparel City, an industrial park intended to attract international investment into the sector and also allow domestic textile and garment firms to expand their operations.

There is optimism about higher exports in a variety of sectors, and the textile sector is well poised to immediately benefit from improved market access. But Pakistan also faces competition from lower‐wage countries including, importantly, Bangladesh. Understanding the comparative productivity of Bangladesh and Pakistan is therefore critical for understanding the prospects for the RMG and knitwear sectors in Pakistan.

This pilot project has two main components; i) collection of data related to productivity and quality for a small sample of firms in Pakistan, and ii) pilot an intervention aimed at improving productivity and/or quality

The aims of the data collection exercise are to:
Learn about the quality of data and how to measure productivity of the Pakistani RMG sector
Understand productivity levels and dispersion in the Pakistani garment sector
Make comparisons in productivity in the sector between Pakistan and Bangladesh.

We will build on the experience developed by two of the researchers on a project in the RMG sector in Bangladesh, where they have collected line‐day level production data from a number of factories.

A comparison of productivity across factories and across countries will be possible through the collection of comparable standard minute values (SMVs). Benchmarks constructed for the Bangladeshi sector will also be interesting and valuable to the Pakistani sector.

We also aim to develop and conduct a pilot intervention in three factories. The pilot will include survey work, so that we gain experience in all of the dimensions of data gathering in Pakistan. The intervention is yet to be defined, but is likely to involve either consultancy on specific production lines within a factory, or training of low‐level management employees. We will use the pilot intervention to gain a better understanding of the issues related to productivity in the sector, from the perspective of the factories.