Global economic crisis not yet affected Sri Lanka

The Global Economic Crisis has not affected Sri Lanka to a considerable extent currently but there is concern that its effects will be felt in the months to come.

This was said at a meeting held at the Ministry of Enterprise Development and Investment Promotion, Mass Media and Communication and Enterprise Development and Investment Promotion Minister Anura Priyadharshana Yapa and leading apparel industry manufacturers and exporters to study the effects of the current Global Economic Crisis on Sri Lanka’s apparel industry.

Some of the problems the industry faces at present arise from a reduction in the orders of readymade garments (RMG) manufactured in Sri Lanka. In the future this problem is likely to grow.

Hence there is a need to look at the most effective countermeasures that could be implemented to address the challenges faced by the industry.

Also participating were Enterprise Development Minister Mano Wijeratne, Secretary, Ministry of Enterprise Development and Investment Promotion B.H.M. Rathnasiri, BOI Chairman/Director General Dhammika Perera, Board Member of the BOI Channa Palansuriya and BOI’s Deputy Director General (Investment) A.M.C Kulasekera also participated at the meeting.

In addition there is a comparative shortage in labour available to the apparel industry. The situation is likely to worsen, when an expected decline in the US demand for RMG comes into effect. However the situation was much more positive in Europe since the GSP+ agreement remains in force which ensures that Sri Lankan-made RMG still remain competitive.

There was a general agreement on the part of the State and private sector representatives present that the industry would need to keep costs under control, and also improve their internal systems to face reduced orders.

Another suggestion made was to develop better working relationship between management and labour unions to ensure the smooth functioning of the industry throughout the period of the economic downturn.

Minister Yapa recommended that this interactive meeting between the Government and BOI with government industry representatives must be held once in every 3 weeks to ensure that an ongoing dialogue between all stakeholders is developed, that the market’s situation is closely monitored and that necessary steps can be taken to offer protection, if necessary to this vital economic sector.