Apparel sector targets US$ 5 bln - JAAF Chairman
by Lalin FERNANDOPULLE
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Ajith Dias
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Retention of the GSP Plus benefit and sustaining existing businesses
are major challenges this year for the apparel industry, Chairman, Joint
Apparel Forum Association (JAAF) Ajith Dias said.
He was addressing a seminar on ‘The Impact of the Global Financial
Meltdown to the Sri Lankan Economy’ organised by the Institute of
Chartered Accountants of Sri Lanka (ICASL).
He said the extension of the trade concessions is vital for the
sustenance of the garment industry which is a US$ 3.2 billion export
business. The apparel industry accounts for over 45 per cent of the
country’s export revenue.
The termination of the GSP Plus concessions will be a major threat to
the employment of over 300,000 people who account for approximately 15
per cent of the workforce in the country. The apparel industry is the
largest contributor to the economy which is around 10 per cent of the
GDP.
The European Commission will accept submissions from GSP Plus
beneficiary countries up to February 18 and thereafter will review the
reports of each country. The Commission will obtain recommendations from
other countries and notify countries within six months of the status
with regard to the extension of the scheme.
“Apparel exports to the United States and Europe have been severely
affected due to the recession. US and Europe are major destinations
which account for over 70 per cent of Sri Lanka’s apparel exports”, Dias
said.
He said the Sri Lankan rupee has to be devalued to enhance the
apparel export revenue. A devaluation of the rupee be around Rs. 118-120
against the US dollar would be realistic given the current global
turmoil. A 20 per cent devaluation of the currency is not feasible.
Exporters have requested policy makers to consider a 20 per cent
devaluation of the rupee following the adverse impact of the global
financial crisis. The Central Bank has stated that it will not devalue
the rupee but rather allow the course of time to determine the value of
the rupee. Over the past three decades the apparel industry has been
focusing on innovation, competent workforce, international reputation
for quality and environmental accountability which has helped develop
into a sophisticated industry from tailors to total solutions
specialists.
Dias said the adjustment in the utility costs and the survival of the
SMEs are major concerns of the apparel industry. The SME sector
industries cannot afford the rising cost of energy.
“The apparel industry hopes to achieve over US$ 5 billion by 2010 and
beyond and consolidate its position in the world market.
Expansion in the North and East, regional collaboration and exploring
emerging markets are some of the key objectives”, he said.
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