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28 Feb 2023

Apparel Resources

Pakistan: Union leader reports over one million informal textile workers face job losses during economic crisis, without access to welfare schemes or severance

"Around one million informal workers in textile industry to be hit due to economic crisis", 28 February 2023

National Trade Union Federation Pakistan (NTUF) Secretary General Nasir Mansoor said, as a result of Pakistan’s economic uncertainty, over one million informal workers in the textile sector are likely to be impacted.

Mansoor was quoted as saying by Pakistani newspaper The News International, “At least one million informal workers– mostly from the textile sector– are likely to lose their jobs.” He further stated informal workers in Pakistan will be left without access to any social welfare scheme or severance packages given their employment status

Mansoor added that many companies carry out hiring procedures via third-party contracts due to the fact that companies are bound to offer different perks to employees given special laws for workers, calling it a ‘bleak situation’.

He said, “Most companies ask informal workers to come in for 15 days in a month. And while they submit a month’s worth of work, they are paid for the 15 days they come to the office.”

He noted that massive devastation was created due to the 2022 floods and that around 45 per cent of the cotton crop has been washed away. He also surmised that the delay in opening letters of credit (LC) could be attributed to the industrial slowdown.

Federation of Pakistan Chambers of Commerce and Industry (FPCCI) head Irfan Iqbal Sheikh noted, “Many companies have already suspended their operations because they do not have resources. The next three to four months are going to be tough for the economy.”

Containers with essential raw materials have been stuck at ports for weeks, he added, and that lack of clarity from the government regarding import restrictions is further likely to worsen Pakistan’s economic situation.