Garment-IndustryDespite government’s claims that the withdrawal of the GSP Plus facility in 2010 would bear no severe impact on the country’s economy, the EU’s decision to withdraw the facility has been estimated to cost the government billions, and has had a huge impact on the garment industry, which was at the time a thriving sector in the country.

However, despite government’s claims that it would not affect the garment trade many factories have been forced to close down, while thousands have been rendered unemployed. This situation has recently forced the government to rethink its stance on the EU’s trade concession.

The GSP Plus trade concession most certainly assisted the country’s industrial exports and its withdrawal has affected export income and the trade balance adversely, as the economy is deeply dependent on industrial exports.

The overall income from apparel exports in 2011 was US$ 4100 million, while it had declined to US$ 3850 million in 2012. A senior Manager of Unilak fashion who did not wish to be named said that not everyone was affected by the withdrawal of the GSP Plus, while around 70% of exports were to the European Union which was affected by the GSP withdrawal, 30% including his company were exporters to the US.

While other countries, which are dependent on the garment industry, are providing their industrialists with concessions and incentives, the Sri Lankan government is taking on an arrogant attitude and refusing to accept that the apparel sector is in turmoil. The rising cost of living and the meager wages will only put more pressure on the industry and make it less competitive with other countries. Unless the government takes measures to address this issue and at least provide some concessions to revive this sector, the Sri Lankan apparel industry, a thriving venture in the past will remain as a thing of the past. (SL)