research needed in garments industry
"One of the features of the Sri Lankan policy making is the
non inclusion of research studies which bear on critical policy
issues and in that context the book 'Ready-made Garment Industry
in Sri Lanka: Facing the Global Challenge', written by Dr Saman
Kelegama is one very useful and important," said Finance Minister
Dr Sarath Amunugama speaking at the recent book launch.
said this because of the lapse in research study, they had to depend
on ad-hoc material, personal experiences, which were not satisfactory.
He said that such organizations as universities, research institutions
and the Central Bank used to have discussions focused on various
important aspects of policy making, but there has been a decline
in that type of supportive research.
Saman Kelegama, Executive Director, Institute of Policy Studies
and the editor of the book, said there were two schools of thought
for the future of the readymade garment industry in Sri Lanka.
is that 12 percent of the well established firms that control 72
percent of the industry are expected to expand and consolidate and
in this process make use of smaller firms either by acquisition
other view is that whatever the percentage of exports that is controlled
by the top 12 percent firms, the large scale industry is not competitive
enough to show solid performances in the post 2004 period.
there would be competition among Asian countries to capture part
of the shrinking share, Sri Lanka would be at a loss because in
the domestic supply side the inadequate development of backward
linkages, weak forward integration, low labour productivity, increasing
cost of production etc are shown by pessimists to highlight the
lack of competitiveness.
his comments, Dr. Upananda Vidanapathirana, Secretary, Ministry
of Industry, Tourism, and Investment Promotion, said:“There
are different views coming out from various individuals involved
in the garment industry about the future of the industry.
that the countdown for a quota free era has begun, there should
be a more accurate picture on the industry. More information, more
analysis is required.
book shows that there is an urgent need to restructure the garment
industry to face the post-2004 period without being complacent about
a possible US-Sri Lanka FTA that will come to Sri Lanka's rescue,
or that the WTO Agreement on Textiles and Clothing will not be implemented
by end-2004 due to pressure from some lobbies, and so on.
claim that Sri Lanka should go for more value added products and
capture the niche markets. The book says that the top-end of the
market is equally competitive as the bottom end -- other countries
that are coming out of the quota system will also be aiming at this
segment and thus competition would be intensive at the high end
of the market.
for Sri Lanka to shine at the top-end is going to be tough.So a
sensible strategy is to focus on a mix of high-end, middle-level
and low-end products, rather than going fully for high-end garments.
would like to see the larger well-established industries playing
a more active role in making use of some of the small and medium
scale industries to do subcontracting work or acquire them and repositioning
them to face the global challenges.