Saturday, 4 January 2014

The Collapse of Ghana's Textile Industry....2013 / How Did China & India become sooo Rich?????

Title: Haruna Iddrisu's Ministry Collapses Textile Industry

Textile manufacturers have expressed disappointment in government for endorsing the demise of the local textile industry in the country.

The manufacturers say they have been taken aback by the decision of the Trade and Industry Ministry to halt the activities of the task force it had put in place to rid the market of pirated textile products.
According to the manufacture, the decision by the government does not only subvert the growth of the local textile industry, but also constitutes a subtle endorsement of the illicit activities of traders in pirated textiles in the country.

“The Textile Garment and Leather Employer’s Union is shocked and gravely disappointed about the unilateral decision of the Ministry of Trade & Industry to suspend the operations of the Anti-Textile Piracy Task force, without recourse to the stakeholders, thereby EMBOLDENING the perpetrators of the elicit trading activities in the country,” the textile union said in response to the directive.

The manufactures are also questioning government’s commitment to its obligation as a member of the World Trade Organisation to protect intellectual Property Rights and create a congenial environment for industries to grow and retain jobs.

As a result, Textile and Garment workers across the country would be demonstrating tomorrow, to protest against unfair competition from cheap imported pirated goods, which is collapsing the textile industry in the country.

The Workers union was last Friday given clearance by the police to embark on the demonstration.
The textile industry in Ghana has been on the decline, mainly due to unfair competition from pirated designs of local textile manufactures, which are imported into the country from China.

Information gathered by The Chronicle indicates that the major textile manufacturing companies are currently producing just about a third of their capacity, while others are on the verge of collapse, due to the influx of their pirated designs on the market.

The perpetrators of these illegal activities only pirate the designs of the local textile manufactures, take it to China and produce them in large quantities and sold on the Ghanaian market at very cheap prices.

To save the local industry from this unfair competition, the Ministry of trade issued a guideline early this year, for the importation of African print into the country.

The guidelines were intended to provide a frame work of administrative procedure through which numerous unfair trade practices including evasion of imported duties, pirating of patent and trademarks and smuggling among many others could be controlled.

The guideline included directives, which required all such importers to register with the Ministry of Trade to allow effective monitoring and an inspection of all imported African print to ensure they are not pirated designs from any local manufacturer.

It is, however, not clear what informed the Ministry of Trade’s decision to sideline these guidelines to allow a boom in the trade of these pirated prints at the expense of collapsing indigenous industries.
Source: Daniel Nonor/The Chronicle

Credit/ Source:

Paulina say: There are some names in the Ghana's government ----when I see them ---it just makes me wanna *%$£*@!

The thing is.....while the Gods-that-be in Ghana continue to beg, steal & borrow (mercy), many of us, including me, are looking at the Chinese & Indian model and wondering --how did these two great nations became soooo rich etc etc....

How did China, once a poor agrarian country become the second largest economy on Earth????? Surly its worth taking a closer look at 'some' of what the Chinese and the Indians are doing well and emulate it.......

It seems the Ghanaian-Gods-that-be have no ideologies, no plans, no vision for our future!!! For starters we (Ghana) seem hell bent on relaying on 'Aid' and on the land --forever instead of industrialising, hell bent on being 'CONSUMERS' instead of producers, and are busy running the little bit of fabulousness/prosperity/beacon-of-African-light/hope etc etc at the beginning of the 'Mills' government/regime ---into the ground (mercy).....

May 2014 bring Ghana better leaders. Educated leaders who truly want success for Ghana -and won't stop until they achieve it....... May we like China see industries/factories springing up all over Ghana -creating work/wealth and may we become producers/exporters and not 'mere' consumers/importers of cheap goods from economies/countries that have managed to get their 'houses' in order...   -in Jesus Name -Amen...

I must confess, I've found it very difficult to read any books in the past four years, ---tooo busy being busy, but one book I've read over and over again is, Dana Thomas' 'DELUXE, How Luxury lost its lustre'...

I know some of you are thinking --Luxury --again, but as any social commentator will tell you, a growing 'middle-class'  and 'luxury consumption' are the biggest indicator that a nation is on the rise.....

Anyway, the aforementioned book is a must-read for anyone wanting to take a luxury brand or two to Africa!!! Offering a real insight into how the big luxury brands strategized and marketed themselves to the opening Asian market and beyond, 'DELUXE' funny enough, also offered me, a real economic novice an incredible insight into China's rise...

Thus, I'm thinking .... instead of importing, importing & importing or borrowing more money from the Chinese, becoming more indebted to them -only goodness knows what this means for future generations of Ghanaians, ---we should instead -learn from them -now -and maybe start filling our regions with factories and assembly lines etc etc.......

Anyway the following are a few bits 'n 'bobs I've noted from La Internet with regards to China's incredible rise... Please note, I know that China is not perfect, but show me a country that is.....we have to start from somewhere....

How Did China & India become sooo Rich?????
"Well one reason is they EXPORTED things to the United there exporting business is doing quite well. I think we should SELL OUR GOOD there, for starters."

"China is using the tried and true method of Mercantilism to quickly monopolise industrial assets. They are doing mercantilism / free trade hybrid that 18th century Britain did to get powerful and that Kaiser's Germany did to compete with Britain."

"Here's a basic description on the relationship between the two countries: America's economy thrives on spending money - spending money causes economic growth. China imports materials from Australia to make goods, they then lend money to America, then sell the goods to America. So all America is doing, is borrowing money from China to import goods from China! By doing so, they build up their debt while China keeps getting richer. Japan has a similar relationship. America is now printing money to pay off their debt. They cannot borrow money to pay off debt for another country or that will make the situation worse."

There are a lot of reasons; it’s a very complex situation. Contrary to popular opinion, it isn’t because Americans are lazy or the Chinese notably hard working, it’s simply a matter of economics.

One reason is simply that they are going through their own industrial revolution. They have massive populations and any given person is able to produce exponentially more than they could have before, so the gross national product is amplified greatly.

Reason number two is also due to the massive population. There is a greater quantity of manufacturing jobs demanded and a lower supply, so companies can pay their labour much less than in the U.S., and the workers will still be happy, because the jobs are better than what they would have had before. It’s not that Americans are lazy or don’t want the jobs, it’s because they literally cannot live off of the wages paid in China (a dollar or less per hour for a manufacturing job). The cost of living is just too high, and there’s a minimum wage anyway. Interestingly enough, the manufacturing jobs in China have raised the average wages enough, that China is losing some of it’s attractiveness to other nations.

Another big reason was that until 2005, China was fixing their exchange rate. They kept their currency, the Yuan, purposefully weak, compared to the dollar. This means the dollar had more buying power in China than it ought to have had. Because of this China’s exports were extremely attractive. If you follow economic news, this was actually one of the biggest sources of tension between the U.S. and China; just as big, if not bigger, than the outsourcing issue.

India has such a large IT industry because not only do they have inexpensive labour, their labour is also highly educated, comparatively.

As far as goals of China and India, they simply want to do well for themselves; expand their wealth, and their world influence; the same as any country.

Would China or India be hurt by other countries becoming competitive economically? Somewhat. They do so well because their labour force is so large and so impoverished. As they continue to grow wealthier, their workforce will be more highly paid, and other countries will be even more attractive than China for labour and exports; it’s already happening in some industries. So, the more China grows, the more downward pressure there will be on that growth to slow it down.


"The same way anyone becomes rich. They make things that others want."

"The reason why the US is making China rich is because we owe them loads of money. they loan us money so we can buy their stuff and keep our economy from sinking even further. this is the reason why. Also you don't piss off the people who loan you money, you just do as they ask."

India & China are prospering because they provide inexpensive well educated labour at less than 1/4 the cost of American, Japanese or European labour. Because the well educated & relatively well paid labour force injects money into their economy, the less skilled members of society are also enhanced financially with more & better paying jobs. Therefore outsourcing of American, Japanese & European jobs, while destroying the economy of the afore mentioned countries, is building the economy of India & China.

As an engineer that knows many American scientists & engineers seeking employment in their fields, I've concluded outsourcing of jobs & technology has damaged our ability to compete in the future. People do not wish to spend the time & money training for non existent jobs.

Because the manufacturing fields are the driving force behind science & engineering, the US is destined to become an obsolete nation dependent upon the Chinese & Indians to produce even our military equipment.

India & China want what every country wants... the ability to influence the rest of the World & be the major player in the drive to develop of the World to their advantage.

"They make a lot in technology, vehicles, toys, clothings. ALOT of things are made in China and then distribute everywhere."

Same way every other developed country grew. They are industrializing. All this talk about "slave labour" is nonsense. When Europe and the US were industrializing, labour rights were non-existent too! People would have to work 16 hour days and if you got hurt on the job then you were SOL. They also manipulate their currency in a way that makes their exports cheap to other countries. Just about every country in the world has done this including the US. This is how countries industrialize! Because wages are so cheap there, many companies want to set up shop in China which creates jobs there and causes their economy to grow even more. Of course, this means taking jobs from somewhere else (US & Europe) but some would argue that it also allows companies to grow even more and create more upper level management positions back in the country where they closed down the factory. This may or may not be true but economies are constantly shifting. The US is shifting from a manufacturing economy to a service sector economy. This includes jobs such as working at a fast food restaurant to working for a consulting or financial firm.

This is how the globalized economy works. I guarantee you China won't be growing at 10% GDP forever. Once they industrialize and catch up to the rest of the developed world, people there will begin complaining about how all of their manufacturing jobs are being outsourced to Africa (the next continent to industrialize).

"Yes, a poor country can become rich. Japan, Korea, Brazil, China have all done it, or are doing it right now. None of them have many minerals though. Mineral wealth is easily pocketed by ruling elite, leaving most people as poor as they were. Just look at Arab countries and Venezuela. The economic "miracles" come from hard-working people and a development-oriented government."

"Basically, China is under communist government, but market economy. This was started in 1978 with Deng Xiaoping's Economic Reforms:

* In 1978, Deng launched what he called a "second revolution" that involved reforming China's moribund economic system and "opening up to outside world." The market-oriented economic reforms launched by Deng were described as "Socialism with Chinese Characteristics." Deng insisted the reforms were not capitalistic: "I have expressed time and again that our modernization is a socialist one," he said.

* The Deng era is known in China as the Period of Reform and Opening. Deng needed great political skill and patience to get his reforms past hard liners in the Chinese Politburo. There was always the belief that the Deng reforms would be reversed at any moment. Deng himself insisted the reforms kept the Communist party from being "toppled."

* The Deng reforms decentralized the state economy by replacing central planning with market forces, breaking down the collective farms and getting rid of state-run enterprises. One of the most successful reforms—the "within" and "without” production plans—allowed businesses to pursue their own aims after the met their state-set quotas. Enterprises and factories were allowed to keep profits, use merit pay and offer bonuses and other incentives, which greatly boosted productivity.

* In the Deng era there was a shift from central planning and reliance on heavy industry to consumer-oriented industries and reliance on foreign trade and investment. The 1978 reforms included efforts to boost foreign trade through the establishment fo 12 state companies to control imports and exports and the creation of Special Economic Zones (SEZs) along China's southern coastline. In 1982, communes began to be dismantled and peasants were allowed to grow and sell produce. In 1985, tariffs were cut from 56 percent to 43 percent beginning the long, gradual reduction of import barriers.

In the 1980s Deng Xiaoping said, "To get rich is glorious" and later added "some should be allowed to get rich first." Many Chinese have taken this maxim to heart and have become very rich.

It's a lot more complicated than that, but another brief summary would be that the government allows the people to "get rich" provided they don't try to topple the government. That's why he came down so hard on the students in Tian'anmen Square in 1989 . . . Deng felt that he "gave an inch, but they tried to take a mile" and brutally ended the self-expression. Since then, economic "freedom" has been even greater . . . all with the subtle message of "don't mess with the government, though."

(You should note that these changes came about AFTER Mao's death in 1976. He and Deng Xiaoping were often at odds over how the economy of the nation should be run.)

The US is becoming poor because it's no longer the worlds top manufacturing economy or powerhouse. The same thing happened to Britain when the US took over from it after WWII....loss of British manufacturing jobs/ power to the US meant bad economic times for Britain 1970's-1990's. Now loss of manufacturing jobs/ power from the US to China mean bad times for the US (2000-2020's or so).

These things happen for real economic reasons and economic facts instead of 'mysteries'.
Manufacturing has high wages and very high multiplier effect (for every dollar of product a manufacturer turns out, it creates lots of other business needing raw materials, supplies, labor, the physical plant, transportation, and pays high wages a factor of about 10 for 1).
'Service' economies don't really work. Service jobs have low wages 'and' a low multiplier (all you really need to provide a service is an office and a phone, a multiplying business factor of about 2 for 1).

The other problem the US has is that it's immigration based population growth grew way too fast from 2000-2010 (5-10 times the rate for Europe), Way too much for a slowing service economy to ever absorb. The US now has therefore too many workers for available jobs, and this is a population demographic that will take decades to work through.

So, get rid of 25 million manufacturing jobs in 25 years, invite 10's of millions of extra people into your slowing service economy of falling wages and low multiplier....and you see the effects.
It would happen to any country and happened in Britain 1970's/ 1980's.
P.S. It has of course nothing to do with 'socialism', the US actually has practiced...right wing conservative Reagan-Thatcherism for most of the last 30 years, about as far from 'socialism' as Margaret Thatcher herself." Yahoo....

"China has not become rich, China has become more like the USA. It is called "reward of iniquity". The central bank creates money to build malls and even whole cities that nobody needs, just so the numbers appear in the nation's GDP. That makes it look like the country is prospering, but it is nothing more than a charade.

A country can not stand phony money very long. In every case so far the limit has been 40 years. The USA is entering its 41st year since gold backing was discontinued. It is significant that all countries are now accumulating gold as fast as they can. When the money crashes, gold will be the only collateral that is still any good. But it has to be physical metal. No more promises." Yahoo