January 26, 1970
REPLY BY THE AGA KHAN
May I thank you first for the honour you have done Me in inviting My wife and Myself to this luncheon and asking Me to speak on a subject which is of great concern to us all. I must say, after such a plentiful luncheon, it is somewhat an arduous task but we are all used to it in the Jute Industry. I am particularly grateful for the generous references you have made to the work of My father and My grandfather for the cause of Pakistan.
It is a well known fact that when Pakistan was first created, the basic industrial infrastructure of the sub-continent was almost entirely left in India. It was also evident that in those regions which became Pakistan, there would be a major influx of population, and therefore a considerable unemployment problem.
It was because of these two factors that My Grandfather proposed that members of the Ismaili community living both within Pakistan and overseas should assist the development of labour intensive industries which also contained a high potential for export. This is how it came about that My community took the decision to invest in two mills, the People's and the Crescent Jute, both at about the same time in 1954.
For many years, these mills operated in difficult conditions. The fluctuations in the price of raw jute and finished products were much more volatile than they are today. In addition, both management and labour were quite inexperienced. Gradually, however, the promoters succeeded in overcoming these problems and, with the very considerable help of the Pakistan Government, they became viable units. Indeed, over the last few years they have done very well.
Between 1964 and 1969, Pakistan's foreign exchange earnings increased from 250 crore to 330 crore rupees. East Pakistan's share of this in 1964 was 52%. Today it is only slightly less at 47%.
Of the 150 crore rupees of exports contributed by East Pakistan in 1968-1969, no less than 98% came from jute and jute products. At the same time, this industry was employing 175,000 men and when you consider that the average size of a family is five or six, this means that between three-quarters and a million people depend for their livelihood on the jute industry.
However, as you all know, for at least the past six years, there has been talk in jute circles about the growing threat of polypropylene bags and other synthetic fibres. We know for a fact that there are several major chemical firms in the United States and in the United Kingdom which are spending very large sums in the research in these man-made fibres, and there are other competitors too; competitors which threaten not only jute products, but the use of the raw material itself in many parts of the world. In Africa, in Latin America for example, jute is being imported in much smaller quantities as local fibres such as kenaf and sisal are developed and combined with jute to save foreign exchange and encourage local farmers. Then there is the increasing use of paper for sacks used in sugar, flour and cement packaging.
Finally, there is the great growth of bulk transport in containers which diminishes the need for sacks or bags of any kind.
This is a situation which is extremely worrying. From the figures I have quoted, it is clear that the Jute Industry is absolutely fundamental to the economy of Pakistan. It is vital that the jute products industry should continue at its present level of output - even if it is too much to expect that it will actually expand. Failure on this score, can mean nothing less that almost a quarter of the Nation's exports loss - perhaps for ever - and massive unemployment in the East wing where it can least be tolerated. Even this assumes that jute in its raw state will continue to be sold on world markets.
I know you have all given a great deal of thought to this urgent problem and in this short address, I can only hope to suggest some possible lines of approach. I think there are three.
The first and most important without question is the need to spend a great deal more money, time, an above all thought, on research - not on new markets for finished bags, but also on new uses for jute products and on improving the quality and yield of the plant itself.
The second important line of approach is, I feel, to find ways of improving productivity in the Mills.
The third suggestion I have in mind is perhaps connected with the second and concerns labour relations.
First, however, let Me expand on what I have said about research. I am told that expenditure per annum on research in this Industry is less than 1/8th of 1% of the total value of your exported products. Whilst I am not suggesting that expenditure in this field should be as high as it is, for example, in the aerospace industry, it is absolutely certain that the figure for Jute Industry should be vastly increased. There are a number of directions in which we can look. One relevant comparison is the result obtained from new strains of wheat and rice which have been developed by cross fertilization and which have doubled and trebled yields throughout the world today. So far as I know, nothing has been done in this direction with Jute. Is is too fanciful to imagine that the development of a new strain of plant could be achieved whose bark will produce fibres which are softer, more malleable and thus capable of a much greater variety of uses? This is perhaps the easiest filed of research to develop in the first instance.
Turning to the question of productivity and labour relations, I think it is generally agreed that there is plenty of room for improvement here, and in the field as a whole; this will be essential if Jute is to compete with its synthetic rivals. I believe I am right in saying that largely due to the smaller number of processes required with polypropylene, the number of men employed per loom is 8 compared with almost 3 in the Jute Industry. It is therefore obvious that we must maxmise our productivity by ensuring the highest standards of maintenance and supervision. It is also time, surely, that we considered ploughing back some of the profits earned in the recent years so that our machinery can be modernised. Indeed, I believe there are only 2 or 3 jute machine manufacturers of real consequence left in the world today. Are the machines themselves as efficient as they ought to be? Here is yet another subject for research.
I realise, of course, that productivity is very much connected with good labour relations, and this reminds Me of a story in America during the worst days of the slump before the war, where workers and management were continually at each other's throats. The Manager of a plant was taking his chairman for a tour of the factory and when they had finished, he beamed with pride and said, "How's that for labour relations boss? All round the plant and not one shot fired."
Well, things certainly aren't that bad in Pakistan today. Indeed I was deeply grateful for the warmth of the reception to My wife and Myself when we visited the People's and Crescent Mills at Khulna two days ago. I know, of course, there is a world of difference between the occasional visit of a VIP and the problems of the shop floor supervisor who has to maintain discipline day after day. But I do think his work can be assisted if Management as a whole are prepared to invest more time, money and once again consistent thought to the question of their workers's welfare. You have done a great deal in this field - clinics, schools, etc., although housing still remains a difficult problem. But I also believe it is essential to work out methods by which you can educate your middle management and senior echelons of labour in the vital importance of their work to the country's economy.
Finally, you are as aware as Myself of the need for positive incentives to improve the quality and quantity to the Mills' output. But has enough thought been paid to the effectiveness of our productivity bonus schemes?
Ladies and Gentlemen, I have spoken of an Industry which is vital to the economy of your country and to the welfare of almost a million human beings. It is an industry in which all of us including My own family and My community have a substantial financial interest. It is an Industry which faces crisis, calling for urgent and well-planned action. There is no need for panic, but equally there is absolutely no time to lose.
We have enjoyed some profitable years but we face growing problems unless immediate action is taken. This is the advice I shall give our own Mills and you may be certain that their Managements will co-operate with the Industry as a whole in any proposals which are agreed along the line of approach left to individual organisations. It must be carried out on a co-operative basis after careful consultation with the finest expert which money can buy anywhere in the world.
If we fail to do this or delay action too long, I foresee difficult times ahead. But if we act together now, through this Association I believe there are still good prospects for the Jute Industry.
The need is for a consistent, continuous and planned programme to explore every possible facet of the jute business so that it may remain competitive in the highly technical world around us today.
Thank you. Source: Ismaili mirror. 1970- Special Edition.
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