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Middle
East faces up to end to garment quotas in the US
Inside the dimly lit corridors of the office a few people are at work, some looking tired and dishevelled. "The (Indian) owner will come back in a week and close the factory," said a Sri Lankan administrative manager, who declined to be named. He said the factory had progressively reduced the number of workers to 35 from Sri Lanka from 50 earlier as costs were rising over revenues. Garment industry sources in Dubai, the commercial hub of the United Arab Emirates, said the factory had already closed down though workers were not aware. A number of small factories like this one that hire Sri Lankan garment workers are closing down rapidly as the Middle East's fledgling garment industry - built on textile quotas concessions in the United States about 15 years ago - struggles to cope with rising costs and the phasing out of quotas in the US. The US quota regime ends in December 2004, an issue that affects mostly small factories which don't strictly adhere to labour compliance standards by US buyers because of high costs involved in infrastructure development. There are some 3,000 workers from Sri Lanka in Dubai with unofficial estimates of some 100,000 Sri Lankans, mostly women, in garment industries across the UAE and the rest of the Middle East. On the other hand, Jordan is preparing for a re-location of garment factories from the UAE and other parts of the Middle East because of its special affiliation to the US. Jordan is the only country in the region to be unaffected by US textile quotas as it has special duty free and quota free access to the United States. It has been attracting new garment investments due to this special concession from the US, since the mid-1990s, because of a peace pact between Jordan and US-backed Israel. More factories are expected before the year's end. "Our factory has been relocated from Bahrain. The management is good - they have transferred us to Jordan," said Parvan, a young Bangladeshi woman speaking to The Sunday Times FT during a flight to Amman from Dubai. Parvan's factory had mostly Sri Lankan workers, a common phenomenon in most garment factories in the region. Zarook Ansar, General Manager at the American Jordanian Company for Apparel, said Jordan though finding favour with garment firms seeking to re-locate from elsewhere in the Gulf, was also feeling the uncertain situation prevailing in the industry. "This year is going to be a big re-shuffle when the quotas ends. Factories are finding their feet in the region not only because of the textile quota issue but also because of a major threat coming from China," he said at his comfortable office at the Qualified Industrial Zone (QIZ) in the Jordanian city of Irbid near the Iraqi border. Ansar, a Sri Lankan with wide industry experience in Madagascar, said China's wages were three times lower than in Jordan posing a major challenge to the garment industry here. The minimum wage here is US$ 125 per month. Most of the garment workers in the Middle East are from Sri Lanka while a majority of the factories are mainly to utilise US quotas. Saleh Diabat, manager of two QIZ's including the one at Irbid, agrees that the end to US quotas would be an incentive for other companies to re-locate to Jordan. "Already we have seen a new wave of investors from Turkey." Nandana J. Lokuwithana, a Sri Lankan businessman having two garment factories and other interest at the Sharjah Airport Free Zone, however believes stronger garment factories will survive the change. Lokuwithana, in Dubai for the past 15 years, says Dubai may be better prepared to face up to the end of textile quotas than Sri Lanka because of higher productivity, speedier delivery of targets and less holidays. "Even though the cost per (foreign) garment worker here is about US $ 250 a month against about $100 in Sri Lanka, we can still survive the change," he said speaking at his Nilona Garment factory at the spacious Sharjah zone. That however would come at the cost of workers forced to work longer hours with less pay. In some factories in the UAE, The Sunday Times FT discovered, workers put in 10-hour work days, six days a week when the law only permits an 8-hour a day/48 hours per week per worker with Friday off. Workers are paid a minimum of 500 Dirhams (I US$ = 26 Dirhams) a month excluding food, accommodation and travel to and from home for foreigners. Garments buyers, who declined to be named, said workers in factories outside special incentive zones are the ones who would suffer the transition as owners either shut down or cut costs to survive stringent compliance standards. "Most garments factories take overbooking and can't keep to targets. So workers on put on endless 24-hour shifts," one buyer said. Workers, interviewed in their factories, said they were happy with the work and living conditions and looked forward to returning home with some savings. However many of them, fearful of losing jobs, were unable to talk freely about the dark side of garment factories. For many of them it is a case of, "from bed to machine, machine to bed," says a Sri Lankan buyer describing the life of a foreign garment factory worker. In Sri Lanka, industry officials say some 100,000 to 150,000 workers may lose their jobs when US garment quotes end this year. "Most of the small factories hiring workers totalling 100 and below will be affected as they don't have enough funds to meet strict compliance standards of US buyers in terms of upgrading machines and meeting labour standards," said Nihal Seneviratne from an association representing small garment factory owners. More than 60 percent of Sri Lanka's garment exports go to the US. However industry officials in Sri Lanka said there is also a shortage of workers of an equal number. "If we are lucky, the employment/unemployment level may even out." |
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