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TRADE: Carpets – Made in Afghanistan for Pakistan’s Profit

KABUL, Aug 12 2009 (IPS) - The Afghan carpet weaving industry is Afghanistan’s second largest, behind only agriculture in terms of size and number of people employed.

Only 5.2 percent of Afghan carpets are sold by Afghans Credit: Najibullah Musafer/Killid Media

Only 5.2 percent of Afghan carpets are sold by Afghans Credit: Najibullah Musafer/Killid Media

Yet, carpet producers across the country receive only a fraction of the profits that their work eventually makes on the global market. And, Afghan carpets are distributed as a product that’s made in Pakistan.

“I weave carpets so that I will not have to beg money for food like so many other children I know,” says Khaleda, a 13-year-old girl from Dasht-e-Barchi, Kabul.

Ever since Khaleda’s father died during the civil war in the 1990’s, she, her mother and three younger brothers – a nine-year-old and two eleven-year-olds – have been making carpets on their own loom to earn enough money to put food on the table and keep a roof over their heads.

Every three months, the family produces a six-metre carpet, for which they are paid 4,000 Pakistani rupees (about 40dollars or 2,000 Afghanis).

Khaleda says that she learned carpet weaving at one of Kabul’s many carpet factories and knows how much the skill has helped her family.

“I do not know what would have happened to us if not for my ability to weave these carpets,” she says.

While the prospect of nine, eleven and thirteen-year-old children slaving away at looms to feed themselves is extremely disturbing, it is not uncommon in Afghanistan.

What is perhaps equally troubling is the fact that carpet producers across the country are receiving only a fraction of the profits that their work eventually makes on the global market. This is because of the lack of facilities to complete the carpet making process in Afghanistan.

Carpets must be sent to Pakistan or Iran for “finishing” – a process where the carpets are cut and washed. These processes require machines and materials that most Afghan carpet weavers – often small operations like the one run by Khaleda’s family – can’t afford.

As a result, Afghan producers only see about 10 percent of the profit that Pakistani exporters realise after shipping the carpets to places like Europe or East Asia. In addition, when the carpets are completed in Pakistan, they are often affixed with a ‘Made in Pakistan’ label, so that while most of the carpet is actually manufactured here, the buyer thinks he is buying a product made in another country.

The Afghan government has tried to slow the flight of carpet revenue to Pakistan by banning the use of Pakistani rupees for all transactions. But since most wholesale exporters are located across the eastern border, Pakistani rupees remain the coin of the carpet realm.

“Most of the carpets are bought by Pakistani companies,” says Ahmad Shaker, who owns a carpet company in Kabul’s Sixth District. “We represent Pakistani companies who distribute the Afghan-made carpets and that is why most transactions are done in Rupees.”

The Afghan carpet weaving industry is booming. Last spring’s plentiful rains only increased the yield for Afghans who cultivate wool, and this bumper crop has directly led to an increase in carpet production.

Gul Mohammad Barik Andish is the executive director of the Ghoriyan Carpet Factory. He says that there is a high demand in Arab countries for the raw materials of carpet weaving – such as thread and wool – produced by Afghanistan.

But these countries buy most of these materials through Pakistan, which buys them from Afghanistan on the cheap, but sells them to others at a significant markup.

The sales structure for whole carpets is no different.

Mohammad Rasoul Fayeq, Executive Director of the Association of Carpet Producers and Exporters of Afghanistan, says that only 5.2 percent of Afghan carpets are sold by Afghans to the wider world.

The other nearly 95 percent are sold to Pakistan, and from there, to the international carpet market, where a much higher price can be demanded.

These carpets are labeled as a product of Pakistan, so that many who buy Afghan carpets, do not even know they are getting a carpet that’s been made in Afghanistan.

One hundred thousand square metres of carpet is worth about 10 million dollars on the international market. Given that about 2 million square metres are produced annually in this country, that would mean a profit of about 200 million dollars a year.

But given that 95 percent of all profits go to Pakistan, this only leaves 10 million dollars left over for Afghan carpet weavers.

The lack of large-scale resources to cut, wash and finish carpets has crippled Afghanistan’s ability to fully capitalise on one of its most valuable commodities.

Experts say that until the government provides resources for start-to-finish production of Afghan carpets, the profit from these products will continue to go to those outside Afghanistan’s borders.

(*This is the first of a two-part investigative series on Afghanistan’s famed carpet industry by Killid Weekly. IPS and Killid Media, an independent Afghan group, have been partners since 2004.)

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