The government’s Rs. 21 billion ($200 million) bailout package to garment and other export industries that would be affected if the European Union withdraws its GSP+ concessions to Sri Lanka, could only give temporarily relief, industry sources said.
“It is anybody’s guess as to how many workers would get laid off -- maybe 15 to 20 percent from the 280,000-strong workforce. The bailout package is just a breather for the industry,” one industry leader said.
The Sunday Times last week exclusively reported the government’s bailout package.
Industry sources also slammed a statement by International Trade Minister G. L. Peiris on Monday at a news conference where he said Sri Lanka had been singled out for an investigation.
They said the EU had, in the past, called for similar measures against El Salvador and Belarus.
According to the EU trade websites, the probes centre on allegations of violations of international conventions, the adherence to which is a pre-requisite to benefit from EU trade concessions.
The European Commission (EC) announced on October 18 that it had initiated an investigation on the effective implementation of certain human rights conventions in Sri Lanka. The probe runs till February 18, 2009 and Sri Lankan manufacturers will continue to enjoy GSP+ benefits until then.
On Friday, Sri Lanka went on the offensive with Foreign Minister Rohitha Bogollagama telling French Ambassador Michel Lummaux that “Sri Lanka will not be part of a process that comes in the form of an investigation on the extension of the GSP+ facility to Sri Lanka.”
A Foreign Ministry statement quoted Mr. Bogollagama as saying the investigation was unacceptable and called for an alternate process to assess the country’s suitability to receive the GSP+ facility.
Another issue that puzzles and also annoys the industry and trade unions is the role of the ministerial committee appointed by President Mahinda Rajapaksa in January. The committee comprising Export Promotion and International Trade Minister G. L. Peiris, Enterprise Development and Investment Promotion Minister Sarath Amunugama, Foreign Minister Rohitha Bogollagama and Human Rights Minister Mahinda Samarasinghe, was tasked to defend Sri Lanka’s eligibility to enjoy the GSP+ faciltiy.
Anton Marcus, a garment sector trade unionist, said this committee had held no talks with trade unions or workers. “We have not been called for any meeting although we have indicated that we would like to get involved in a joint action (government and the industry) in ensuring that GSP+ is granted,” he said.
Industry leaders said that collectively the committee had not had any meeting with the industry.
“Separately there have been meetings like for instance with Prof. Peiris (as the minister in charge). But as a collective body which was presumably expected to report back to the President, there has been no meetings with us,” a garment manufacturer said.
Some 65 percent of GSP+ duty-free benefits are enjoyed by garment exporters while the rest goes to a variety of exports sectors.
The modalities of the bailout package are due to be discussed on Tuesday while the Joint Apparel Association Forum (JAAF) is also working out some proposals to be discussed.