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Textile production constitutes an important economic sector for a large number of developing countries for the following reasons. Firstly, if backward linkages (e.g. cotton production, spinning) and forward linkages (e.g. garments production and marketing) were to be taken into consideration in addition to weaving, the employment generated by this sector would constitute a relatively large fraction of total employment in manufacturing. Secondly, textile constitutes one of the most important basic needs after food and shelter. Thus, a high priority is usually attached to the production of sufficient quantities of inexpensive textiles to cater for the need of low-income groups. Thirdly, local textile production may contribute to the improvement of the balance of payments through both import substitution and export. Finally, this sector may also contribute to rural industrialisation whenever it is feasible to locate weaving mills in rural areas.
Given the importance of the textile sector, great care should be taken in formulating and implementing policy measures which would maximize benefits which may be derived from textile production. In particular, policy measures should ensure that appropriate weaving technologies would be adopted by private and/or public weaving mills since the choice of weaving technology may have important repercussions on employment, foreign exchange savings, rural industrialisation, etc. However, this choice is often difficult to make since weaving technologies which favour a given socio-economic objective (e.g. employment generation) may conflict with other objectives (e.g. satisfaction of the basic needs of low-income groups). Thus, the adopted technology must often strike a balance among conflicting objectives with a view to maximizing social welfare.
The following section provides some indications on the potential socio-economic effects of the 8 weaving options considered in this memorandum. Subsequently, section II suggests a few policy measures which could ensure the adoption and implementation of suitable weaving technologies.
The impact of alternative weaving technologies is analysed, in this section, with respect to the following factors:
- employment generation;
- improvement of the balance of payments;
- basic needs satisfaction; and
- rural industrialisation.
This analysis is based on the following hypothetical case:
- An average per capita consumption of 20 m of cloth per year. This average may be somewhat higher than the over-all average for developing countries.- A total population of 5,000,000 inhabitants.
- Technical and economic data used in chapter IV for the economic comparison of the 8 weaving options.
- Low degree of amenity assumed for the estimation of building costs.
- The same type of cloth as that described in chapter IV, in relation to the economic comparison of weaving options, is also used in this analysis.
Thus, the various effects of alternative weaving technologies are analysed with respect to a total annual production of 100,000,000 metres of cloth of the type described in chapter IV. Table V.1 provides estimates of these effects for each weaving option and scale of production.
II.1 Employment Generation
Direct employment generated per 100,000,000 metres of cloth ranges from 3,060 man-years for option 6 (large-scale production) to 92,000 man-years for option 1 (small-scale production). Weaving option 2 ranks second in terms of employment generation with 38,000 man-years (small-scale production) and 35,400 man-years (medium-scale production). Thus, as to be expected, the two hand-looms options generate a great deal more employment than the remaining six weaving options. Among these latter options, the non-automatic and low-cost automatic looms (options 3, 4 and 5) generate two to five times more employment than the three shuttleless looms (options 6, 7 and 8), depending on the scale of production considered. Option 3 ranks first (in terms of employment generation) in the engine-powered looms category.
If indirect employment were to be taken into consideration (e.g. employment generated by the production of looms), the hand-looms options 1 and 2 should generate much more employment than the other options since hand-looms may be manufactured locally while engine-powered looms are, with some exceptions (e.g. India) imported.
TABLE V.1
Socio-economic effects of alternative
weaving technologies
|
Scale of production and weaving option |
Number of Mills |
Total Employment |
Fixed capital requirements |
Total Energy Costs |
Unit production Cost (Pence) |
Cost of cloth for family of five (£) | |
| | |
|
Machinery |
Buildings |
| | |
|
100,000 m/year | |||||||
|
option 1 |
1000 |
92,000 |
32,600,000 |
31,710,000 |
1,070,000 |
48.314 |
48.314 |
|
option 2 |
1000 |
38,000 |
35,600,000 |
15,640,000 |
610,000 |
37.174 |
37.174 |
|
option 3 |
1000 |
15,000 |
35,600,000 |
11,100,000 |
1,230,000 |
33.434 |
33.434 |
|
1,000,000 m/year | |||||||
|
option 2 |
100 |
35,400 |
19,750,000 |
7,707,000 |
483,000 |
31.775 |
31.775 |
|
option 3 |
100 |
9,000 |
18,300,000 |
4,947,000 |
1,040,000 |
27.289 |
27.289 |
|
option 4 |
100 |
6,800 |
20,450,000 |
4,819,000 |
1,035,000 |
27.395 |
27.395 |
|
option 5 |
100 |
6,600 |
20,400,000 |
4,899,000 |
1,036,000 |
27.366 |
27.366 |
|
5.000.000 m/year | |||||||
|
option 3 |
20 |
7,380 |
8,120,000 |
2,337,000 |
930,200 |
24.344 |
24.344 |
|
option 4 |
20 |
5,640 |
9,740,000 |
2,212,800 |
922,400 |
24.476 |
24.476 |
|
option 5 |
20 |
5,280 |
9,680,000 |
2,272,000 |
920,000 |
24.350 |
24.350 |
|
option 6 |
20 |
5,060 |
27,980,000 |
1,467,200 |
449,800 |
27.013 |
27.013 |
|
option 7 |
20 |
3,360 |
20,940,000 |
1,551,200 |
486,600 |
25.730 |
25.730 |
|
option 8 |
20 |
3,420 |
12,160,000 |
1,372,200 |
810,400 |
24.317 |
24.317 |
II.2 Improvement of the balance of payments
Textile production may affect the balance of payments of a country in the following ways:
- Export of textiles- Import of yarns
- Import of weaving equipment
- Import of building materials for the construction of the mills
- Import of fuel to generate the energy required by the equipment and for lighting, whenever no local sources of energy are available.
Exports will not be considered in this analysis as the types of cloth covered by this memorandum are intended for local consumption by low-income groups. The import of yarn will not also be considered since it is assumed that the same type and quality of yarn is used by the 8 weaving options. The shuttleless looms do use slightly more yarn than the other types of looms, but this should not substantially increase the amount of foreign exchange needed for the import of yarn.
The import of weaving equipment will apply mostly to weaving options 3 to 8 since few developing countries produce non-automatic, automatic and shuttleless looms. Thus, it may be assumed that the total value of equipment, for these weaving options, will be in the form of foreign currency. It is, on the other hand, assumed that the hand-looms used in options 1 and 2 are manufactured locally. Table V.1 shows that foreign currency costs of equipment for the weaving options 3 to 8 range from £8,120,000 for option 3, large-scale production, to £35,600,000 for option 3, small-scale production. Option 3 (non-automatic looms) requires the least amount of foreign currency at both the medium-scale level (£18,300,000) and large-scale level (£8,120,000). Options 4 and 5 require 10% more foreign currency than does option 3, while the difference ranges between 50% to 300% for the shuttleless looms (options 6 to 8).
The import of building materials (in particular cement) for the construction of the mills depends on whether these materials are available locally. If this were not the case, 10% to 20% of building costs may be in the form of foreign currency. The largest users of imported materials would then be weaving options 1 and 2, while minimal amounts of imported building materials would be needed by the weaving options 6 to 8.
The import of fuel to generate the electricity needed by the equipment and for lighting will also depend on the availability of local sources of energy (e.g. fuel, hydro-electric power, coal)
If a fuel were to be imported, a large fraction of total energy costs will be in the form of foreign currency. In this case, weaving options 1, 3, 4, 5 and 8 may be considered as the largest users of imported fuel, the difference in energy use being relatively small among these weaving options. On the other hand, weaving options 2, 6 and 7 will use the least amount of imported fuel. It may seem paradoxical that hand-looms may use as much energy as semi-automatic or automatic looms. The reason for this is that lighting requirements are much more important for the large number of small-scale weaving mills (1000 mills are associated with options 1 and 2) than for the small number of medium-scale and large-scale mills (100 and 20 mills are respectively needed to produce the same amount of cloth as 1000 small-scale mills).
If all foreign currency expenditures were to be taken into consideration, options 1 and 2 (hand-looms) may be found to use the least amount of foreign currency, while option 3 (non-automatic looms) may be found to use less foreign currency than to the other engine-powered weaving options (4 to 8).
II.3 Basic needs satisfaction
The matter of basic needs satisfaction may be considered in terms of annual expenditures by low-income groups on textile products. Let us assume an average low-income family of five persons, each member of the family consuming 20 metres of cloth per year. Estimated total yearly expenditure on cloth by such a family for each weaving option would then be as shown in Table V.1. These estimates range from £24.317 for weaving option 8 to £48.314 for option 1. In general, weaving options 3, 4, 5 and 8 are equally attractive from the point of view of basic needs satisfaction as total expenditures on cloth vary very little from one option to another (£24.317 for option 1 to £24.476 for option 4). If the other options were to be promoted (i.e. options 1, 2, 6 and 7), the average low-income family would have to spend between £1.254 to £23.838 more for its textile needs. Such an additional amount may constitute an important fraction of the total monthly income of such a family. Thus, the latter may either be forced to buy less textile or reduce the consumption of other important items.
II.4 Rural industrialisation
The promotion of rural industrialisation may constitute an important development objective for many developing countries. In general, such industrialisation may not take place if large-scale, capital-intensive plants are favoured over small-scale plants. This is particularly true for large-scale weaving mills which must generally be located in large urban areas for various reasons, including the need of reliable energy sources, good transport facilities and the availability of a large pool of highly skilled labour. On the other hand, small-scale mills could be, in general, located in rural or small urban areas.
Table V.1 shows that 1000 small-scale mills would be required to produce 100,000,000 m/year of cloth while 100 medium-scale mills and 20 large-scale mills would be required to produce the same amount of cloth. Thus, in terms of rural industrialisation, weaving options, 1, 2 and 3 should have a much greater impact than options 4 to 8. A limited impact on rural industrialisation may also be expected from options 4 and 5 should medium-scale mills be favoured over large-scale mills.
II.5 Summary remarks on the socio-economic effects of alternative weaving technologies
The above evaluation of alternative weaving technologies yields the following results:
- Weaving options 1 and 2 (hand-looms) are the most attractive from an employment point of view. Option 3 (non-automatic looms) is, on the other hand, the most labour-intensive when compared to weaving options 4 to 8.- Weaving options 1 and 2 use relatively less foreign exchange than the other six weaving options, while weaving option 3 relies less on imports than weaving options 4 to 8. Energy use is approximately the same for weaving options 1 to 5 and 8, and decreases markedly for options 6 and 7.
- From a basic needs point of view, option 3 is the most attractive at the small-scale and medium-scale levels, and ranks second after weaving option 8 at a large-scale production level.
- In general, large-scale production is preferable to medium-scale or small-scale production with respect to foreign exchange savings and basic needs satisfaction. On the other hand, small-scale production is much more attractive from an employment point of view and with respect to rural industrialisation.
If the four development objectives considered in this evaluation (i.e. employment generation, improvement of the balance of payments, basic needs satisfaction, and rural industrialisation) were to be assigned equal weights, weaving option 3 (non-automatic looms) used at medium-scale production levels should be preferred to other options. It should, however, be noted that the above conclusion is based on a large number of assumptions which may not apply to many countries.
Depending on a country’s socio-economic development objectives, one or more of the weaving options described in this memorandum may be found more suitable than the others. The next step will then be to ensure the adoption of these technologies by private and/or public weaving mills. However, as mentioned earlier, weaving technologies, which should be prefered from a socio-economic point of view, may not be profitable from the point of view of the producer. Governments may therefore need to implement a number of policy measures with a view to inducing producers to adopt weaving technologies consonant with stated development objectives. A number of such measures are briefly described below. It is, however, realised that political and economic constraints may not allow their implementation in all cases.
III.1 Restrictions on the import of machinery
One way of slowing down the adoption of inappropriate weaving technologies could be the imposition of restrictions on the import of machinery required by such technologies. For example, high tariff rates or quotas may be imposed on the import of weaving equipment. However, these measures may not always succeed or could be counterproductive. Instead, requests for equipment could be evaluated on a case by case basis since there may be many instances where the import of such equipment may be justified. If this were the case, the producer should not be penalised by high tariff duties or long delays in the aquisition of equipment.
III.2 Public purchases
In a number of countries, governments have influenced the choice of weaving technology through the purchase of cloth for the public sector (e.g. various categories of workers, the army) from weaving mills which adopt technologies promoted by the Government. This measure, which is relatively easy to apply, may be feasible as long as it does not imply a too high subsidisation of the mills.
III.3 Upgrading of local weaving technologies
Technological innovations in the textile sector have often taken place in industrialised countries and have generally reduced the need for expensive labour. These innovations are therefore often inappropriate for developing countries suffering from high unemployment rates and lack of foreign exchange. These countries should therefore attempt to upgrade the local weaving technologies with a view to improving efficiency and decreasing reliance on imported technologies and equipment. This may be achieved in a number of ways, including research and development work on hand-looms and non-automatic looms, promotion of the local manufacture of simple looms, obtaining information on weaving technologies from developing countries, such as India, which have already acquired a great deal of experience in this field, etc.
III.4 Fiscal and monetary policies
Fiscal and monetary policies may also help promote the adoption of appropriate weaving technologies by the private sector.
One measure which should slow down the use of unsuitable weaving equipment is the imposition of a tax on owned capital equipment. Such a tax will increase depreciation costs and, therefore, the unit production cost of cloth. On the other hand, a number of measures may be used as an inducement to those who wish to adopt appropriate weaving technologies. For example, small-scale weavers may be offered loans at low preferential rates, or may benefit from tax rebates. Wage subsidies may also be considered whenever these are needed in order to make the cloth produced by labour-intensive weaving technologies competitive with that produced by large-scale, capital-intensive plants.
III.5 Assistance to small-scale producers
Small-scale weaving mills may often need various types of assistance if they were to be competitive. Assistance measures may include the following:
- To facilitate the procurement of sufficient quantities of good quality yarn-whenever the latter is imported - as individual small-scale producers may find it difficult to overcome import restrictions and therefore ensure a steady supply of yarn. Thus, these producers would not be at a disadvantage vis-a-vis large-scale mills which do not generally face this type of constraint.- To provide training and technical assistance to small-scale producers with a view to improving productivity and cloth quality. Technical assistance may consist in advice on the improvement of technology, organisation of production within the mill, marketing of new types of cloth, etc. Mill workers may also need further training, especially if new weaving techniques are being introduced. Such training may be provided on the spot or in trade schools whenever the latter are available and relatively close to the mills.
- To promote groupings of small-scale producers with a view to taking advantage of economies of scale in the preparation of, for example, warps. As indicated in earlier chapters, a small-scale producer may not afford the acquisition of a large capacity warping machine, and must therefore share it with other producers. The grouping of weavers (e.g. in the form of production or service cooperatives) may also be advantageous from an economic point of view as the price of raw materials may be lowered if large amounts of these may be ordered in bulk for the whole grouping of weavers. Similarly, better prices for the cloth may be obtained if marketing of the latter can be organised through a single marketing outlet set up by the producers.
- To promote the local production of spare parts for the weaving equipment with a view to avoiding long shut-downs of small mills if these spare parts were to be imported. In the long run and whenever demand for weaving equipment is sufficiently large, the local production of this equipment should be encouraged.
The above measures are only examples of the type of assistance which may be provided to small-scale producers. Depending on local circumstances pertaining to the weaving sector, other measures may be identified and implemented with a view to promoting weaving technologies consonant with adopted socio-economic objectives.
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