The government is to grant some concessions through the Central Bank to tackle losses incurred by Sri Lankan apparel exporters owing to the withdrawal of the EU GSP+ facility, Finance Ministry sources said.
The Central Bank has been directed to offset this loss for Small and Medium scale apparel exporters by providing some financial relief and the modalities of this relief package are being worked out.
Apparel sector trade unions are urging the government to impose conditions ensuring the job security and rights of workers when granting any concessions to apparel exporters. Free Trade Zone and General Employees’ Union Secretary General Anton Marcus told the Business Times that the Apparel Exporters Association has recently admitted that they have gained around 30% profits due to GSP+ benefits but they have failed to pass even a small portion of these profits to workers. The government should impose some conditions preventing them from the cutting down of jobs when granting any concessions for apparel factory owners, he said.
There are constant violations of labour rights even in the export processing zones located in the Western Province, where unions are established and the Department of Labour has easier access for monitoring purposes. Therefore he said that no concessions should be given to apparel factory owners who violate labour rights.
According to the Central Bank, the GSP+ affected 30% of all apparel exports in 2009. A senior official of the Finance Ministry said that Sri Lankan businesses will be given access to international capital and debt markets for funding requirements at lower costs. He added that in addition to these action taken towards diversifying markets, negotiating with buyers, enhancing productivity, and reducing finance and input costs, will gradually offset the possible decline in competitiveness arising from the withdrawal of the GSP+ concessions.
An official of the leading apparel export company who wished to remain anonymous said that at least 100,000 jobs were at stake due to the withdrawal of these concessions with small and medium scale garment factories mostly affected.