Business as Usual? Modern Textile Arts in Afghanistan: Part 1, The Analysis and Outlook

On August 2, 2013, Annette Ittig,

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She said that Afghan carpets and other textiles are not only beautiful, they are important revenue sources for both urban and rural artisans. 

Dr. Annette Ittig is a Dubai-based expert on international development.

She discussed how the Afghanistan’s textile and carpet production has changed over the last 30 years. 

She also explored how the traditional craft and industry have adapted.  Drawing on her extensive field experience with the United Nations and NGOs in Afghanistan, Ittig highlighted contemporary production initiatives, including USAID-supported small business and microfinance projects, a socially-responsible, women-owned textile business, and locally-financed production.  they are important revenue sources for both urban and rural artisans.

Dr. Ittigg’s presentation was based on work in progress and so we could not take photos of the Powerpoint document that she used to illustrate her presentation.  But drawing on her summary and some notes of my own, I think I can characterize her basic argument, approximately. 

It is, I think, that some small business and micro-finance projects have been well-designed and successful, but have not achieved “sustainability,” and will likely not continue long after the outside support provided by such sources as USAID or others is withdrawn.

She showed a conference of Afghan rug figures in a large room.  It would traditionally, I think, have been unthinkable that such a room would not be decorated with carpets.  But the room in her photo was done entirely in “wall-to-wall” carpet and seemed symbolic of the direction in which she felt things were moving.  To repeat she seemed to think that some USAID-supported small business and microfinance projects had had some success but had not attained sustainability and would likely fail once external support was withdrawn.

When the Annette Ittig presentation was announced, Rob Leahy, a dealer is South Carolina, who has been active in efforts to analyze the prospects for the Afghan rug and textile industry and in stimulating Afghan imports, wrote me, saying that he suspected that his views of the situation were likely distinctive from Ittig’s.

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http://www.finerugsofcharleston.com/

He pointed me to a post on his own blog that provides some of his own analysis.

With his permission here is that post from his Charleston Rugs Blog:

Understanding the market for Afghan rugs

Date: November 7, 2012

Author: Rob

As world demand for area rugs recovers, hand tufted rugs are taking an ever growing share of the market—over 50%. That’s up from about 25% five years ago.  These data are in dollars, and since tufted rugs have a 3-4:1 cost per unit relationship to hand knotted rugs ( the unit growth is amazing).  This is proof, though, that new consumers are entering the U.S. rug market.

Afghanistan: Room for Growth

Growth

According to official U.S. import data, hand knotted rug shipments have leveled off at about $225 million annually.   Of that $225 million, $54 million was shipped to the U.S. from Pakistan, and only $8 million coming directly from Afghanistan.  The demand rates show that Afghanistan’s exports to the U.S. has the potential to be $40 million—5 times the volume that the country generates in direct sales today.

Will weavers in countries that compete with Pakistan let Afghanistan take this or any amount of market share?  The answer to that question is the crux of the matter. The diagram below demonstrates the opportunity for growth in the carpet trade of Afghanistan.

Trends

The diagram was developed from a discussion with the consultants hired by the Defense Department’s Task Force for Business and Stability. It looks at the cost advantage versus the ability to produce innovative products compared to other countries, or product differentiation. It reveals sourcing trends in the hand knotted rug business and places Afghanistan in a very fortunate position.

The movements depicted by the arrows are relative to each other.

India, the world’s largest producer of rugs, has increased weaver’s wages 30% by government decree, and new industries located in carpet making districts have been attracting workers away from established rug companies.  These pressures lead to higher prices and a wave of product development by Indian rug suppliers.  You can see how the arrow for India moves up in differentiation and slightly left, marginally reducing the country’s former price advantages.

 China’s weaving companies, being directed by a central government, have ceased all new development and raised prices on existing hand knotted and hand woven products by as much as 100%.  This has effectively taken China out of the market for hand-made rugs, redirecting workers to machine-assisted, hand tufted rugs.

Iran had been the third largest shipper to the United States until 2011. Now, under embargo for rug shipments, legal exports have dropped to zero.  They continue shipments to the Middle East, Turkey, some European countries and Russia, but because of sanctions and shortages within Iran, inflation is high, diminishing any cost advantages that had existed.  Soon, Iran will be in the most unfavorable cost situation relative to other countries.  Banned from the most viable markets, there is little incentive to create new styles or methods and differentiation is diminishing as well.  Iran’s position stays highest, though, because of the historical diversity of the products made there.

Turkey and China are being affected by almost identical forces, but Turkey is not a centrally planned economy and changes there are a result of the market demands by nearby European countries. A combination of weavers retiring from the field and other job opportunities for the remaining workers has decimated the rug weaving business in Turkey.

Even with a significant decline in shipments, Pakistan remains the world’s second largest shipper of hand knotted carpets.  It’s not certain how much of Pakistan’s shipments are native or of Afghan origin.  Consequently, these countries are linked and the relationship will continue for many years into the future.  Regrettably for Pakistan, unlike India and China, they are not able to move into machine assisted and machine made carpets. A considerable lack of power within the country prevents this beneficial evolution.

Instead, Pakistani carpet companies have become more innovative and concentrated on higher value products.  Still, these are being sourced in Afghanistan.  This moves the arrow for Pakistan well up the differentiation scale, but also reduces its cost advantage.  Compliant Afghan weavers have given Pakistan a meaningful cost advantage over India, but this is being eroded and will eventually disappear.

This leaves only Afghanistan to discuss.  Because of Pakistan’s need to innovate, Afghanistan will have expanded options in product differentiation as Pakistan teaches the Afghan traders new skills and methods. Sophistication and efficiency over time should add cost advantages, even compared to Pakistan, and put the Afghans in a very favorable position near the optimal center point of the chart.

End of Rob’s blog entry.

I admitted, early on, that I knew Chris Walter whose Yayla project in which Afghan Ersari Turkmen, largely then in refugee camps in Pakistan, were weaving natural dyed carpets for the U.S. market.

Rob said “There are really two businesses in Afghanistan.  The tribal, which Chris Walter (Yayla) did indeed pioneer, and the export commercial market which sprung up while Chris was pioneering.  

“The first Turkmen rugs from the camps evolved into the (cotton warp) Kazak quality and Chobrang rugs.  That’s where I came in.  

“The tribal styled rugs, now being made across northern Afghanistan are still the same, but do not sell in quantities sufficient to create equity for the country, so parents are no longer teaching the children to weave.

Rob also said that the more recent situation had made him more pessimistic about the future of the Afghan rug industry than the more hopeful aspects of his analysis indicated in his blog above.

“The export rugs, which could help pull the business (and, the country perhaps) out of it’s death spiral, are not being supported well enough to assure that the business will survive.  A lot of money is being spent; I know of three US Gov’t programs totaling $6.0 million that is going to do very little good for the industry,  Sadly, since I wrote most of the relevant things to my blog last Fall, I have become increasingly pessimistic.  It really bugs me.”

I also contacted Emmett Eiland, the well-known dealer in Berkeley, CA, who has a long experience buying rugs, many from Afghanistan.

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http://www.internetrugs.com/

Emmett has been in the Afghan contemporary market since the early 70s and has written a book (out in a second edition) on contemporary rugs woven with natural dyes.  His shop is in Berkeley, CA. 

Emmett gave me the following take on the Afghan rug situation:

“You’ve picked a good topic to ponder.

“My quick response is that:

1. “Money put up to subsidize rug weaving is probably wasted, at least in the long run.  With a lot of help from supporters, such projects start out with promise, but for various reasons, the staying power just doesn’t seem to be there. That is not to say that it is impossible for some future subsidized project to succeed.

2. “You mentioned Chris Walter: Chris and his producer, Habibullah Karimi,  do wonderful work, and theirs is not the only top-notch production. Perhaps there are fewer small producers making a wide range of rugs such as what we used to see around Chicken Street in Kabul, and perhaps we see fewer village and tribal rugs rugs with traditional Afghan designs.

3. “But, as someone who has bought rugs in Afghanistan since 1971, I much prefer what is in the Afghan market today. I would be happy never again to see the two-color Dulatabad “Afghans” of forty years ago, while I am delighted, for instance, with many of the new rugs in Khotan designs.”

I sent Emmet’s indications above to Rob Leahy for reaction.

He said in turn:

Rob2

“Emmett is more optimistic.  And correctly so on the higher value goods that the four or five ex-pat Afghan companies sell. Those families are breaking new ground and setting today’s standards for rug design.  But, I think he would agree that they are small productions and it is the people in villages like Andkhoi, who made those Daulatabads, that need the help. 

“When the millions of Afghans came home from the camps in Pakistan many now made their living weaving rugs.  Men like Habibullah, with Chris Walter, did a marvelous job spreading weaving skills throughout the refugee community.  After these people re-emigrated, over 2004-06, there were as many as 1 million weavers in Afghanistan.  It is generally accepted that another 2 to 3 million participated in the business from sheep herding to trucking.  That was almost 20% of the Afghan population.

“Most rugs were made for the same finishers in Pakistan as the worldwide Kazak and Chobi boom continued.  But, since the 2008-2012 demand bust hundreds of thousands of weavers have had nothing to do and they left the business.  At the time, ISAF and NGO jobs were plentiful.  During that period USAID had a few well intended carpet development projects that raised hope, but made little impact.  The Dept of Defense’s TFBSO built a pair of cut and wash plants, but they failed to help finance production, and what rugs were woven continued to be financed by and sent back to Pakistan for finishing and sale.  I was involved from 2007 through 2012 with the Commerce Dept’s efforts and, sadly, must admit that our support created little benefit either.

“In 2013-14 the USDOD, the USDOC and the USDOL are each spending $2.0 million that may not help create jobs for the Afghan carpet business.  The DOD and DOC money will be spent on trade promotion for which no inventory financing will be available to produce the orders generated.  There has never been a serious financing program for the Afghan trade because it would require management and assessment; not attributes I ever saw in US Gov’t agency programs.  The DOL money will go entirely to prevent child labor in the carpet industry.  The notion that Afghan children weave rugs for export may be misguided.  

“So, John, while I fully agree with (and respect) Mr. Eiland, I cannot be optimistic about the general Afghan carpet trade.  I don’t mean to seem negative, but I have to say that I think I share these frustrations with those four or five Afghan companies I mentioned in my opening paragraph.  

I shared Rob’s thoughts above with Emmett, who replied:

Emmett3

“Hi Rob, have we met? I’m terrible at remembering names. I have met good people in my shop in Berkeley whom I admire, but whose names I cannot recall. If we haven’t met, we should.

“Thank you for reminding me about the many, many Afghan weavers who lost their livelihoods when the camps shut down.

“You have been in the thick of things while I have merely taken an interest. but if I am not mistaken, many of the camp weavers were in the trade relatively briefly during the camp days, the Hazaras, for instance. Weren’t they farmers, by and large, before their time in Pakistan? Is it naive of me to think that helping them might be a matter of putting the farmers back to work rather than the weavers?

“I think my optimism, if that’s what it is, springs from the history of rug weaving in the Middle East, at least as I understand it. World Wars, economic depressions and the like have seriously dampened the rug trade at times, and yet it seems to spring back. Personally, for 40+ years I have been expecting/dreading that rug weaving in the Middle East would soon be a thing of the past. Industrial jobs would pay more than weaving. Technology would trump knot-tying. But against all odds, rug making is in a period of renaissance. It gives me cheer.

“But we are looking at the rug world from different perspectives. From what I can tell from our brief correspondence, you are trying to help Afghans while I am merely battening off the fabulous rugs they weave. Still, it seems to me as if weaving in Afghanistan will endure. The industry may not employ as many people as it did during the camp days. But it might again spring to life next time there is a crisis.

“Thanks for the dialogue. Thank you, John, as Rob said, for starting it.”

Rob replied further:

“Hello Emmett, No, I don’t think we have met.  But, on my blog I have listed your blog as one of my favorite blogs.  <www.charlestonrugsblog.com>  Of course, I’ve read your books!

“When the Afghans came back to their country the styles that were pioneered in the camps were still selling very well, so everyone kept weaving.  At the time, it became much more of a factor in the Afghan economy than it had ever before been.  In the camps, the Turkmen were the prime force to teach others to weave pile rugs.  As you know, all the tribes made flat weaves, but the The Turkmen made the widest range of  pile rugs.  And, pile rugs were what was selling at the time.

“The Hazara from the central valley were pastoral, but those in Quetta had been making pile rugs right alongside the Belouchi for centuries.  They are still a large source of weaving for the Pakistani.  Apparently, the Hazara of Kabul had become very business savvy even before the Russians came and, while in exile, adapted very quickly to the business prospects of weaving.  It’s no coincidence that the innovative rugs that we see defining ‘rug style’ today are made by Hazara families.   Most Hazara who went back to Bamyan returned to farming, but many still weave.  The NGO named Arzu is based there; http://www.arzustudiohope.org/.  The Hazara who returned to near Mazar-e Sharif have suffered with the rug trade’s up and downs.  So, like everything in Afghanistan, it’s complicated.

“Recent times in Afghanistan are such an aberration.  The economy has become dysfunctional by depending on the purported beneficence of outsiders.  The normal progression of the rug trade that, as you point out, always seems to somehow survive, doesn’t track in Afghanistan.  It, like most things in that region, is really an Af-Pak phenomenon.  Our government thinks that all that the Afghans need to resurrect their rug trade is ‘orders’.  They totally ignore the fact that the largest part of the Afghan and Pakistani rug trades need each other to survive.  

“This especially is true for the northern provinces and Kabul where almost all of the export business to the US and western Europe is exported through Pakistan.  The Herat area, western Afghanistan, still produces a lot of rugs, but these largely go to Russia, Eastern Europe and to the bazaars on ISAF bases and the Embassies.  Sadly, there is almost no local consumption of newly made rugs. The shops are awash in very cheap Wiltons made in Iran and Turkey. This is the most common complaint from Afghan weavers at the street level.  (Believe it or not, all the rugs in the halls Ministry of Commerce and Industry are Wilton knock-offs!)  But, from the export oriented traders that, after repatriation, controlled thousands of looms out in the villages the only complaint I ever heard was, “I can’t get financing on my orders”.  So, they remain connected to their last few relatives in Pakistan and to the Lahore finishers.

“I agree that, since I entered the rug business in 1971, I too have oft heard the chorus ‘the end is near’ being sung.  But, after really studying the situation for my work with the Department of Commerce, I think it could be.  I summarized my analysis in a post I wrote on my own blog.  It ends with the future of the hand made rug trade hanging in the balance between Pakistan and Afghanistan.  I’d be interested in your thoughts?   The summary is at http://www.charlestonrugsblog.com/2012/11/07/understanding-the-market-for-afghan-rugs/#more-383.

Emmett responded further:

Hi Rob-

“I wind up being a little confused about your predictions for Afghan rug production.

“…my impression is that a year or so ago you seemed pretty optimistic about the future of rug weaving in Afghanistan, but seem now to be quite discouraged.

“I guess I remain upbeat about the future.

“As a dealer I can get wonderful Afghan merchandise at good prices, and I don’t have to depend on one or two dealers to supply me.

“There are producers in Pakistan/Afghanistan who understand what looks great (to me and my customers) and what doesn’t, and they know how to get their productions woven and finished and sent.  They are even able to weave designs we give them.

“I know of nothing that is going to put an end to this in the short-run.

“There seems to be no shortage of weavers or material. Nor are we looking at an embargo nor any other political situation that will shut everything down.

“From the perspective of a retailer, things look good and the future seems bright enough.

“If I am wrong, I won’t be able to say I wasn’t warned! I value your careful research and your correspondence.

Thank you,  Emmett

Rob responded, explaining why he’d become so pessimistic,

“Up to October 2012, I was working with the USDOC.   Alex Zahir, (I think you know him), and I were managing a project called “Sheep to Shop”.  It was an ambitious initiative and up through our successful event in Dubai in late September, I was hopeful.   ‘Sheep to Shop’ is one of a number of projects I mentioned in an earlier message that was certainly well intended, however, severely hamstrung by gov’t effectiveness issues of vision and implementation.

“Over that last year of work I learned how precarious the Afghan situation is, especially the Af-Pak relationship, and indeed I became discouraged.  I wrote that gloomy report I’d  attached earlier called “Afghanistan and the future….” last October.   It was a result of the more realistic view of the situation I learned after months of study and work in Afghanistan.   As my point of view evolved, please realize that I had to project an upbeat mood while I was working with USDOC to promote our program.   I understand and apologize if this seems equivocal.

“The paradox in the good flow of rugs now versus a severely altered potential in the near term is dependent on two factors. 1.) The exchange of power in Afghanistan and 2.) the political situation in Pakistan.  Chaos in either country will dramatically affect the other. The jeopardy in either situation devolving changes on a monthly basis.  Last Fall it looked like Pakistan was going to crater, but they got through their election and the current administration appears business friendly.  One can only guess how long this uncertain calm in Pakistan will last

“I don’t need to describe how tender the socio-political environment is in Afghanistan.  It seems that the best thing that the US can now is to leave Afghanistan quickly before the benefit of all the good foreign governments and NGO’s tried to foster in Afghanistan withers with the passage of the seasons.

“If you accept the volatility I described, the situation our own businesses enjoy is more likely to change than remain the same.  I think we can assure ourselves that it will not get better for us or, much more importantly, easier for the peoples of Afghanistan and Pakistan.

Best wishes,  Rob

This is John Howe, again.  I tried to contact, but have not heard from, Chis Walter,

chris-walter-afghan-refugees

[This is an old photo of Chris (right) from Emmett’s book, 2000]

but you can get a sense of what he’s doing on his web site:  http://www.yayla.com/

Chris is offering (primarily wholesale) more than 10 “lines” of production.  http://www.yayla.com/rugs/

Most of these lines seem woven in northern and central Afghanistan, although there has always been a Tibetan production in Nepal  (and that seems to have grown a lot; the Tibetans were willing early to weave any design wanted) and some of Chris’ higher priced lines are now woven in India.

There is less “tribal” production and a move to traditional patterns from other rug-weaving areas, plus a clear willingness to weave contemporary designs.

But as Rob noted above, Chris’s operation and some others similar to it, seem viable, but are working with only the top end of  the Afghan market, and their success says nothing about the lower levels that recently comprised most of it.

Another thing it would be interesting to know about is how the “schools” element of Chris’ rug-weaving projects are working.  Chris’ Turkmen projects in refugee camps in Pakistan provided basic education to weaver family children.  Part of the basic “coop” deal was that weavers earned wages and the “profits” were used to finance schools that provided basic education to the children.  Chris had schools as large as 500 students with one third girls. One of the “advantages” of the refugee camps was that one could locate the schools accessibly.

Check this link for a description of what Chris’ projects do in this area in Afghanistan: http://barakatworld.org/Our-Work/Afghanistan.html  Also here: http://barakatworld.org/Our-Work/Pakistan-Schools.html

Now all of this is just a set of “snapshots” of the assessments of different people engaged in aspects of the Afghan rug and textile weaving world and how they see its future. 

Dr. Ittig and Rob Leahy seem pessimistic, Emmett Eiland cites aspects that make him optimistic and what can be seen on Chris Walter’s web site, suggest that some enterprises like his may be viable.

Part 2 of this post deals with the Afghan rugs brought into the session that was the occasion for Annette Ittig’s talk.  You can access using this link: https://raymondj.wordpress.com/2013/11/12/afghan-rugs-business-as-usual-part-2-the-rugs-and-textiles-brought-in/

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