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UNIDO calls 'Chennai Leather Cluster' among ten most dynamic clusters
Feb '09
Chennai leather cluster in Tamil Nadu is among the 10 dynamic industrial locations in the world surveyed by the United Nations Industrial Development Organisation (UNIDO) in its Industrial Development Report 2009.

An important contribution of this Report - titled “ Industrial Development Report 2009 – Breaking in and moving up: New industrial challenges for the bottom billion and the middle income countries” - are the ten case studies which have been carefully researched and compiled from all over the world, and “ these are included in the Report to demonstrate practical models for Bottom Billion nations to learn and profit from”.

Institutional and policy direction and support for technological upgrading and environmental compliance are the principal drivers of exports from the Chennai leather cluster, UNIDO says.

The 10 case studies featured in the Report are from the following countries – Argentina (Buenos Aires – Automotives); Brazil (South-eastern Brazil – Pulp and paper); Cambodia (Pnom Penh – garments); Chile (Los Lagos – Salmon); China (Qiaotou – Buttons); India (Chennai – leather); Indonesia (Jakarta – Automotives); Lao PDR ( Vientiane / Champasack – Agro and Wood); Malaysia (Penang – Electric-Electronics); and Nigeria (Otigba – computer components).

The Survey of the 10 dynamic industrial locations verifies empirically whether these locations, competing effectively in international markets in specific products, are also able to provide enhanced economic and social benefits to the people in terms of employment, skills, wages, and better environmental practices in those locations that registered significant export growth over the period 2000-2006. (Industrial dynamism here is defined on the basis of export growth from these locations exceeding the national export growth rates of the selected products).

Employment elasticity of exports was positive and strong in all the locations, and Chennai enjoyed the highest elasticity of 1.3 ( which means that for every 1 % increase in exports, employment went up by 1.3 %). Employment and average wages in the surveyed firms in Chennai rose from 4,643 workers and US $ 174 per month in 2000 to 7,754 workers and US $ 187 in 2006.

On environmental practices, the Report says that although leather goods manufacturing is pollution-intensive, the erection of treatment plants through the efforts of relevant institutions and the state government of Tamil Nadu, and the efforts of export firms facing stringent controls in the Organisation of Economic Cooperation and Development (OECD) markets have helped lower pollution levels.

United Nations Industrial Development Organisation

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