October 17 is the international day to end poverty. There has been much progress toward this important milestone: the World Bank Group’s latest numbers show that since 1990 nearly 1.1 billion people have escaped extreme poverty. Between 2012 and 2013 alone, around 100 million people moved out of extreme poverty. That’s around a quarter of a million people every day. This is cause for optimism.
But extreme poverty and the wrenching circumstances that accompany it persist. Half the world's extreme poor now live in sub-Saharan Africa, and another third live in South Asia. Worldwide nearly 800 million people were still living on less than $1.90 a day in 2013, the latest year for which we have global numbers. Half of these are children. Most have nearly no education. Many of the world's poor are living in fragile and conflict afflicted countries. In a world in which so many have so much, it is unacceptable that so many have so little.
Over 80 percent of Pakistanis consistently report that their economic wellbeing has either deteriorated or remained the same. Only 20 percent, disproportionately concentrated in the very top of the distribution, feel that they are better off and similarly small numbers believe that economic conditions have improved for their locality. If we took a poll today, it is possible that many of you would say that extreme poverty has risen rather than fallen.
But in fact, the national data tells a completely different story! According to the national poverty line set in 2001, Moreover, these gains were not concentrated among those close to the poverty line. Even the poorest 5 percent of the population saw an improvement in living standards.
There is now a huge window of opportunity for South Asia to create more apparel jobs, as rising wages in China compel buyers to look to other sourcing destinations. Our new report – Stitches to Riches?: Apparel Employment, Trade, and Economic Development in South Asia – estimates that the region could create 1.5 million new apparel jobs, of which half a million would be for women. And these jobs would be good for development, because they employ low-skilled workers in large numbers, bring women into the workforce (which benefits their families and society), and facilitate knowledge spillovers that benefit the economy as a whole.
But for these jobs to be created, our report finds that apparel producers will need to become more competitive – chiefly by (i) strengthening links between the apparel and textile sectors; (ii) moving into design, marketing, and branding; and (iii) shifting from a concentration on cotton products to including those made from man-made fibers (MMFs) – now discouraged by high tariffs and import barriers. These suggestions recently drew strong support from panels of academics and representatives from the private sector and government when the report was launched mid-year in Colombo, Delhi, Dhaka, and Islamabad. South Asia is now moving on some of these fronts but a lot more could be done.
Moving up the apparel value chain
Stitches to Riches? finds that South Asia’s abundant low-cost labor supply makes it extremely cost competitive (except for possibly Sri Lanka). But rapidly rising living costs in apparel manufacturing hubs, coupled with international scrutiny, are increasing pressure on producers to raise wages. Plus, countries like Ethiopia and Kenya, who enjoy a similar cost advantage, are entering the fray, and some East Asian countries already pose a big challenge. The good news is that the policy reforms needed to keep the apparel sector competitive would likely benefit other export industries and transform economies (view end of the blog).
But is it true? Not so.
In fact, the "17 year" statistic comes from a 2004 internal UNHCR report, and it was accompanied by many caveats which have been lost along the way. The statistic does not refer to camps, since the overwhelming majority of refugees live outside camps. It is limited to situations of five years or more, so it is an average duration of the longest situations, not of all situations. Most importantly, it refers to the duration of situations, not to the time people have stayed in exile.
Take the situation of Somali refugees in Kenya. Refugees started to arrive massively around 1993, about 23 years ago. Their number now stands at 418,000. But can we say that all 418,000 have been in exile for 23 years?
In fact, . As we see in Figure 1, numbers vary every year: they reflect political and military developments in the country of origin. In fact, a large part of the current total could not have arrived before 2008, i.e. about 6 or 7 years ago.
Figure 1 Number of Somali refugees in Kenya (UNHCR data)
Along these lines, and using data published by UNHCR as of end-2015, we re-calculated the earliest date at which various cohorts of refugees could have arrived in each situation (see working paper). We then aggregated all situations into a single "global refugee population" and calculated global averages and median durations.
So what are the results?
When we look at the "global refugee population" (See Figure 2), we can now distinguish several distinct episodes of displacement.
Figure 2 Number of refugees by year of exile
There is a large cohort of about 8.9 million "recent refugees," who arrived over the last four years. This includes about 4.8 million Syrians, as well as people fleeing from South Sudan (0.7 million), Afghanistan (0.3 million), Ukraine (0.3 million), the Central African Republic (0.3 million), and Pakistan (0.2 million).
Another large cohort, of about 2.2 million, has spent between 5 and 9 years in exile. It includes refugees from Afghanistan (0.5 million), the bulk of the current Somali refugees (0.4 million), and people fleeing from Colombia (0.3 million) and Myanmar (0.2 million).
About 2 million people have been in exile between 10 and 34 years. This includes years during which numbers are relatively low, and two episodes where they are higher, around 14 years ago, with the arrival of about 0.2 million Sudanese refugees, and around 24 and 25 years ago, with the arrival of about 0.1 million Somalis and 0.1 million Eritreans.
Lastly, a large group of refugees has been in exile for 35 to 37 years: these 2.2 million refugees include mainly Afghans, but also about 0.3 million ethnic Chinese who fled into China during the 1979 war with Vietnam. Finally, there are few very protracted situations, up to 55 years, including mainly Western Sahara.
We can now turn to average durations. As of end-2015, the median duration of exile stands at 4 years, i.e. half of the refugees worldwide have spent 4 years or less in exile. The median has fluctuated widely since the end of the Cold War, in 1991, between 4 and 14 years, and it is now at a historical low. By contrast, the mean duration stands at 10.3 years, and has been relatively stable since the late 1990s, between 10 and 15 years.
But this leads to another important finding: trends can be counter-intuitive. In fact, a decline in the average duration of exile is typically not an improvement, but rather the consequence of a degradation of the global situation. The averages increase in years when there are relatively few new refugees, and they drop when large numbers of people flow in, for example in 1993-1994 (with conflicts in Former Yugoslavia and Rwanda), in 1997-1999 (with conflicts in DRC and other parts of Africa), after 2003 (with conflict in Iraq, Somalia, and Sudan), and since 2013 (with the conflict in the Syrian Arab Republic).
We also looked at the number of people who have spent more than five years in exile. As of end-2015, this number stands at 6.6 million, and it has been remarkably stable since 1991, at 5 to 7 million throughout most of the period. For this group, however, the average duration of exile increases over time – largely because of the unresolved situation of Afghan refugees which pushes averages up. It is now well over 20 years.
This short analysis of UNHCR data shows that . It is important to ensure that this debate is informed by evidence, which can help provide a more nuanced perspective of a complex issue.
- fragile and conflict affected states
- Research and Publications
- Sustainable Communities
- host communities
- Refugee Camps
- refugee crisis
- forced displacement
- Migration and Remittances
- South Asia
- Middle East and North Africa
- South Sudan
The China sourcing conundrum
In conversations with U.S. and European retailers and brands, ELEVATE – a company formed in 2013 to support corporate social responsibility – finds that apparel buyers rate diversifying away from China as one of their top three sourcing goals.
This is not to suggest that there is a desire to exit China – which currently holds by far the largest share of global apparel trade, at 41 percent – but rather a need to significantly reduce dependence on product from China, owing to rising costs, factory closures, unenthusiastic second generation family ownership, new attitudes about working in factories, and a perception that China wants to move to higher-value manufacturing. Sourcing and procurement organizations feel uncertain, and uncertainty is not a friend of supply chains.
The problem is that for all its uncertainty, China still has a huge base of factories, a well-developed transport infrastructure, and a comprehensive eco-system that supplies cut-and-sew operations, and management that has matured with years of experience. Even if a buyer would like to give another country an opportunity, many corporate risk managers view certain countries or regions as quite challenging for doing business.
South Asia could seize this opportunity by better meeting requirements – besides competitive costs – that are vital to global buyers. These include: (i) quality, which is influenced by the raw materials used, skill level of the sewing machine operator, and thoroughness of the quality control team; (ii) lead time and reliability, which are greatly affected by the efficiency and availability of transportation networks and customs procedures; and (iii) social compliance and sustainability, which has become central to buyers’ sourcing decisions in response to pressure from corporate social responsibility campaigns by non-governmental organizations, compliance-conscious consumers, and, more recently, the increased number of safety incidents in apparel factories.
Surveys of global buyers show that East Asian apparel manufacturers rank well above South Asian firms along these key dimensions, as noted in a new World Bank report on apparel, jobs, trade, and economic development in South Asia, Stitches to Riches (see table). So, what can South Asia, which now accounts for only 12 percent of global apparel trade, do to become a bigger player? An encouraging recent development is that buyers have started collaborating to facilitate new sourcing possibilities – as the case of Bangladesh illustrates.
Summer is a time for reflection, for taking stock and seeing what is trending. So far this year, the Jobs Group has published 39 blogs on a wide range of topics. But what blogs have resonated most with our readers? Below you will find our most-read blog posts. In true top ten style, they are presented them in reverse order.