Feasible bailout package, GSP+ critical for apparel sector

By Uditha Jayasinghe
Caught amidst a burgeoning financial crisis, the outgoing President of the Apparel Exporters Association – 200GFP Channa Palansuriya strongly urged the government to set in motion both a feasible bailout package and intensify diplomatic lobbying for the extension of GSP+.

Addressing the 10th Annual General Meeting (AGM), at which both Deputy Finance Minister Dr. Sarath Amunugama and BOI Chairman Dhammika Perera were present, he appealed for the adoption of the new bailout package that had fewer regulations than what is currently proposed by the government. Explaining that maintaining the same production levels, profits and employment as last year was all but impossible as demanded by the government, he asked the government to consider an alternative plan that had been proposed by the apparel industry.

Recalling that Sri Lanka presently has the highest production price in the world, Palansuriya reiterated the call for a 15% devaluing of the rupee. He also maintained that if GSP+ were to be withdrawn from 2010, the industry needed to tighten their belts from this year onwards and that the government plans had made such precautions all but impossible, since they demanded volumes and employment to be kept at current levels. Pointing out that international competition was forcing Sri Lanka on to the back foot, Palansuriya noted that the government should act speedily if it wanted to prevent factories from closing down.

“If even one company closes down we will not be able to re-open it as things are. Given that over 300,000 people are directly employed in our industry and it is the largest foreign exchange earner it must be protected if Sri Lanka is to emerge from the global financial crisis unscathed. We urge the government to look in a broader context to get results and not focus only on employment and production,” he said.

Responding to the plea Minister Amunugama assured that the government had set in motion a wave of “silent diplomacy” to ensure that GSP+ would be retained and that all would be done to make the bailout plan as pragmatic as possible. However, he admitted that given the current situation little could be done for currency depreciation and much would depend on global developments.