COLOMBO – Sri Lanka’s apparel sector can spearhead an export-led economic recovery to help overcome the current macroeconomic crisis. This is according to Wilhelm Elias, chairman of the Sri Lanka Apparel Sourcing Association. In recent months, Sri Lanka’s apparel sector has battled fuel shortages and unreliable electricity supply amid a deepening economic and political crisis. Most recently, people have been queuing to buy Liquefied Petroleum Gas (LPG) cylinders in Colombo (pictured).
The South Asian nation is now in talks over an International Monetary Fund (IMF) bailout deal as it struggles to pay for imports such as fuel and food.
Despite this, Elias says the country’s apparel industry has held up remarkably well. He states: “Apparel, which accounts for 40 per cent of total exports, and at least half of all merchandise exports, has not halted production even for a day. In the first four months of 2022, export records have been set, and the industry has continued to earn much-needed foreign exchange.
“Those export earnings have been useful to pay for critical imports, combined with lines of credit from trading partners such as India and China as the Government negotiates a restructuring of its external debt of almost US$57 billion (mostly in dollar-denominated bonds, public and private). Sri Lanka is negotiating with the International Monetary Fund (IMF) and other lending agencies for a resolution to the crisis and progress is being made.”
He added: “Prior to the pandemic, the apparel industry had set a target of US$8bn in exports by 2025; the Joint Apparel Associations Forum (JAAF), the industry’s apex body etched a vision and strategy for 2030 estimating double-digit growth. Companies cemented their buyer relationships and infused further investment. The Government set up the Eravur Fabric Park, to onshore even greater value addition. Apparel has been and will continue to be the foundational structure of Sri Lanka’s manufacturing capacity.”
Elias has now called for Sri Lanka’s government to stabilise the country’s finances and says support for export-led manufacturing sectors such as apparel can help narrow the huge trade deficit.
He added: “Export and manufacturing industries must be prioritised. It is the foreign exchange earned from these industries that pay for the country’s essential imports, primarily fuel and pharmaceuticals. The operating environment for export-oriented industries must be strengthened, with the supply of energy and import of essential raw material continuing uninterrupted.”