Key to Ending Poverty

Written by: Lorenz Wied Written by: Anton Schumann Written by: Navdeep Singh Sodhi

A global research project based on data from 1800 to 2018 by Gherzi Textil Organisation, Switzerland, and Gapminder Foundation, Sweden has come up with remarkable findings that would go a long way in tackling poverty. The findings.

Textiles played a dominant role in lifting people from extreme poverty, for women's empowerment and for economic development, more than a century ago in today's wealthy countries. And textiles still are. But there are trade-offs. New business models and steep growth of the industry are putting pressure on people and nature.

It is unfortunate that the industry gets a selective-often skewed- attention from the media. The headline grabbing coverage ranges between glamorous portrayal of fashion and drudgery of sweat shops. The industry's leverage on the most important targets of UN Sustainable Development Goals (SDG) is seldom discussed.

Historically, the textiles industry was the corner-stone of development for most countries. It remains the world's foremost industry with a vast impact on the socio-economic development of many countries. The global apparel and footwear industry was worth $1.7 trillion in 2017, and growing at 2 per cent annually till 2022. If it were a country it would be the eighth largest economy after Italy.



Textile is the main lever for nine of the SDGs.

o No poverty

o Zero hunger

o Good health and well-being

o Quality education

o Gender equality

o Decent work and economic growth

o Industrial innovation

o Reduced inequalities

o Climate action

Environmental issues

The textiles industry has a massive impact on the environment in terms of resource consumption (land, water, energy) and pollution (air, water). Today's consumerist society is driven by instant gratification characterised by excess textile consumption. Our wardrobes are overflowing with clothes we will seldom wear. Then, these garments end up in charity, used clothes collected from retail and finally in third world countries to do "some good for the poor." According to an estimate an average American discards 70 pounds of textile waste every year, leading to the receiving countries  drowning in "fashion for free."

Andrew Brooks of the King's College London, has beautifully documented the grey trade in used clothing and its adverse impact on Africa's cotton & textile industry, in his book Clothing Poverty-The Hidden World of Fast Fashion and Used Clothing. Social and health issues This became known to the wider public in 2013, when Rana Plaza in Bangladesh crashed and 1400 people died. Brands were made responsible for this catastrophe-which was right, but not completely. Brands do not employ people in production countries to manufacture textiles and garments.

Highlights

Project Duration: January - December 2019

Target groups for funding  

Brands and Retail: to provide understanding of sourcing impacts.

Industry organisations: to provide the big picture with data across countries and stages of industry development.

Manufacturers: to get the big picture of textile impact on economic and societal development.

Politics: to set the framework for decent work, equality, environmental regulations, investment safety, infrastructure.

It is the local businesses owned by individuals or states. What is true is that orders are placed via vendors and buying organisations. And they negotiate hard, very hard. They are trained to be tough negotiators.

What we see is also that prices for the same garment from season to season, order to order are not going up but down. The massive growth of the textiles sector and the ever-increasing price pressure for fashion items at retail are accelerating the supply chain to squeeze further. This is a development that is not tolerable. And it is bad for society and environment. What we see is a serious management problem, not a social issue. Producing countries need better regulations, education and companies taking orders need to be better negotiators.

On the one hand we can see that countries in Asia and Maghreb countries are producing textiles and garments, and the industry is generating economic growth. On the other, we see that environmental disasters are a reality and prevailing wages are significantly lower than officially reported. Safety standards of buildings are often insufficient. This makes brands and retailers to become active and to fix safety standards of buildings, where garments are produced for specific brands and retailers.

One organisation-Accord, was very active in Bangladesh. Only recently, the government of Bangladesh forced Accord to stop their work. The government itself will look after the safety standards of buildings and workplaces. This in turn is putting orders at risk, as retail has difficulties to assure that safety standards are according to their country's expectations.

Two perspectives

Getting out of extreme poverty is a struggle for individuals, local governments and businesses. Different levels of experience in structures, processes, legal frameworks and management have to cope with different expectations of "customers" from wealthy countries. What we get is a gap, sometimes a big gap. This is the field where media wants to do some good to show "how it really is". But having the experience what it means to live in extreme poverty lets people endure circumstances on the way out. Having a bed instead of sleeping on the floor is a big improvement.

Having access to water and electricity, having a job on a regular basis to have a constant income changes the life of people in poverty drastically-this is what people in wealthy countries cannot imagine any more, as this situation was pretty much the same for 85 per cent of the world population 200 years ago.

Everyone from back then is dead and cannot tell how it was.

Historical perspective

Cotton: The cradle of global industrialisation and trade

From ancient times well into the nineteenth century, the people of the Indian sub-continent were the world's leading cotton manufacturers. From there, cotton growing and manufacturing skills moved west, east and south, placing Asia at the centre of the global cotton industry, where it would remain well into the nineteenth century and return in the late twentieth century. As the modern world came of age, cotton came to dominate world trade.

Cotton factories towered above all forms of European and North American manufacturing. Cotton is the world's oldest commercial crop and one of the most important fibres for textile production. Grown in 75 countries, with a total of 33 million ha area under cultivation, cotton is one of the most significant crops in terms of land used after food grains and soybeans, representing 2.2 per cent of the global arable land.

Transformational jobs in apparel manufacturing

As developing countries explore ways to enhance living standards and reduce poverty, they are increasingly focusing on policy options to create jobs that are "good for development." For South Asia, it is a policy imperative as the region is amid a demographic transition. For the next three decades, it must absorb over 10 million persons who will enter the workforce every year. The World Development Report describes jobs as the cornerstone of both economic and social development whereby the value of a job to society can far exceed its value to the individual jobholder.

The apparel industry employs millions of female workers and is regarded as the gateway into formal manufacturing jobs for women whose alternative is agriculture or informal labour market. Highlighting the role of cotton-textiles in mobilising industrial labour, the Empire of Cotton found that indeed cotton manufacturing became the most female-dominated manufacturing industry to emerge in the eighteenth and nineteenth centuries.

Women dominated the cotton textile workforces throughout Europe and the US, although male workers dominated in Mexico and Egypt. Most women came from the countryside due to the families' strategy to retain access to land by supplementing dwindling agricultural incomes through wage work. Even today, the share of female employment in the textile and apparel industry is higher than in other manufacturing industries.

In the CMLV (Cambodia, Myanmar, Laos, Vietnam) countries and Bangladesh, 75 per cent of the workforce is female. Only in India and Pakistan does the industry employ more men than women, reflecting the wider challenge of low female participation in the overall economy.

Apparel industry and the 'bottom billion'

Hans Rosling, the founder of the Gapminder Foundation offers an alternative perspective about the way we look at things. In his book Factfulness, he describes how we have achieved real progress in eradicating extreme poverty and illustrates the transformative impact of jobs in apparel manufacturing. According to him, the world population could be divided into four income levels.

Each figure in his example would represent 1 billion people and the seven figures in it would show how the current population is spread across four income levels. Those at Level 1 earning below $2 / day, indeed suffer from destitution.

The folks at Level 2 (income $2-8 / day) eke out a living by making about $4 a day. If you can land a job in the local garment factory, you will be the first member of your family to bring home a salary (about 3 billion people live like this today). Level 3 represents people with daily income between $8-32 / day and those earning above $32 / day are placed at Level 4.

Interestingly human history started with everyone on Level 1. Just 200 years ago, 85 per cent of the world population was still on Level 1, in extreme poverty, whereas today most people are spread out in the middle, across Levels 2 and 3, with the same standards of living as people had in Western Europe and North America in the 1950s.

A case in point is Bangladesh: one year after its independence in 1972, Bangladeshi women had on an average seven children and life expectancy was 52. Today, a Bangladeshi woman has two children and a life expectancy of 73. In the last four decades, Bangladesh has risen from Level 1 to Level 2. Interestingly, Bangladesh's apparel exports grew from $1.3 million in 1980-81 to $29 billion in 2017.

Textiles and international trade

Textile is the world's most globalised industry. According to WTO, in 2017, textiles and apparel trade was ranked among top five merchandise exports representing 6 per cent market share. The phasing out of the MFA (MultiFibre Agreement) regime in 2005 led to remarkable growth of international trade in textiles and apparel, from $471 billion in 2005 to $736 billion in 2017. More significantly for major producing countries, it is a major source of export earnings. For India and China, textiles and apparel exports represent 12 per cent of total merchandise exports whereas for Bangladesh over 80 per cent of total exports come from apparel and 16 per cent for Vietnam.

The textiles industry has a remarkable transformative impact on our lives and especially on the global industrial economy. Most importantly, it has the influence to lift millions out of extreme poverty and women's economic empowerment.

Dealing with synthetic fibres

The industrialisation of synthetic fibres in the 1960s was a huge lever for textiles to expand beyond the fibre supply from cotton, linen, wool, silk and hemp from around 25 million tonnes up to over 100 tonnes today. Microplastic which is washed out from garments during machine washing is a big threat as environmental pollution. What can be done to stop all this enormous contamination of nature and burden of food? Interesting enough that mankind enlarged its ecological footprint in the early eighties to bigger than 1. Today our ecological footprint is bigger than 1.50. This means we are using 50 more natural resources than nature can reproduce.

The project thesis

Can industrialised countries connect with countries on the brink to end extreme poverty in a socially and environmentally sustainable way?

What can we learn from the past 50 years to avoid social injustice and contamination of the environment? What will the textiles industry do to supply the world? Will exploitation of people in countries with extreme poverty open a new chapter in Ethiopia, Burkina Faso, Burundi, Somalia or Myanmar?

Against this backdrop an international team of researchers and 'textile economists' at Gherzi Textil Organisation, Zurich has conceived an ambitious project to put into perspective the impact of the textile industry on the economic and social landscape. The project would be supported by UNIDO and attract contributions from many stakeholders.

UNIDO's response

UNIDO is a specialised implementing agency of the United Nations with a mandate to reduce poverty and improve the living conditions of people through the design, development and implementation of locally appropriate technical assistance initiatives that provide tailor-made solutions for sustainable industrial development.

Project purpose

Contribute to inclusive and sustainable industrial development of textile producing countries and improve factfulness of available data from the textiles industry to be able to better understand the leverage of the industry on societal, ecologic and economic development of nations.

Main activities

Output 1.

Impact Areas

Put existing industry data in correlation with national data and analyse the impact of the United Nations with a mandate to reduce poverty and improve the living conditions of people through the design, development, and implementation of locally appropriate technical assistance initiatives that provide tailor-made solutions for sustainable industrial development.

Six key impact areas to be analysed would be:

o  Poverty alleviation

o Decent work and economic growth

o Gender equality-women's empowerment

o Quality education

o Industry innovation and infrastructure

o Agro allied linkage (cotton)

Gathered data will be available on www.gapmind-er.org for free as a service to the industry and society.

Countries

The project would cover most textile and apparel manufacturing developing countries and LDCs. In the first phase, the spotlight will be on Asia whereas in Phase 2, countries in Africa & Middle East, Americas and Europe will also be covered.

Output 2.

This module would focus on the larger value chain including supply chain partners, brands and retail to reflect on buying strategies.

Output 3.

The aim of this module would be to offer an evidence based policy advocacy to key stakeholders in the government, media and civil society and consumers at large. The objective would also be to foster international cooperation for an industry which has such a global reach after agriculture.

Conclusion

It is apparent that textiles, the world's most globalised industry, is undergoing a paradigm shift. The industry has a huge impact in terms of economic and social parametres such as production, consumption, trade & investment, employment, gender equality, environment and realisation of SDGs at large.

A global initiative conceived by Gherzi Textil Organisation,the Switzerland-based international consultancy firm, in collaboration with Gapminder Foundation,Sweden and UNIDO, is intended to generate a contemporary perspective which is expected to become a global reference point for the stakeholders. All are invited to join.