Inflation and instability in the exchange rate have the power to deplete any economy and these two factors are currently giving nightmares to Sri Lanka. Rupee depreciation is hampering the country's industries and garment manufacturers are facing all the heat.
Statistics reveal that around 100 small and medium garment factories have closed down over the period of 18 months. The apparel industry, which once boasted of around 800 factories, has now gone down to 350 to 400.
In an exclusive interview with Fibre2fashion, Mr Ajith Dias, Chairman of the Joint Apparel Association Forum (JAAF), the garment industry representative body said, “The country is facing inflation mainly due to increase in Government expenditure as it fuels extra cost. Authorities need to take efficient measures to control it. Even though US dollar is losing its value, economic imbalance in Sri Lanka has led to rupee depreciation, disabling it to exploit the favourable scenario.”
While talking about effects of instable exchange rate in the apparel industry, Mr Dias said that Sri Lankan companies and business entities who import raw materials, have to pay more because of the depreciating rupee. This affects profitability, by driving up costs not only of raw materials, but also wages, utilities food and transport. “We are facing difficulty in competing and JAAF is seriously concerned as the cost of production in Sri Lanka is increasing.”
The JAAF Chairman informed that Sri Lanka does not have any labour problems but that section is now asking for higher wages because the cost of living has increased due to inflation. He also added that machine operators here are currently the highest paid amongst all Asian countries.
In the end Mr Ajith Dias revealed that JAAF is in constant dialogue with the Government and other entities on the issues and is expecting fruitful results soon.
Fibre2fashion, News Desk - India
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