Garments in peril
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Aldoris came down the lane in his music-blaring tuk-tuk. While residents frown on loud music or noise from vendors, they tolerate Aldoris and generally welcome the distraction as he is a lovable character who loves to chat while selling his breakfast food.It was Thursday morning, two days before our beloved country celebrates 75 years of independence. By the way, there was an interesting Facebook post where one person said it was wrong to use the word ‘celebration’ when commemorating ‘independence’ day. “Celebration means we are having a party and 75 years of independence is no party as it’s the worst economic crisis since independence. A country that has officially declared bankruptcy should not celebrate independence and spend lavishly on a party,” the post said.
Anyway, the trio who was in conversation, went to the gate to greet Aldoris as his tuk-tuk sped down the road. This time, Aldoris had also attached the national flag to his vehicle while also stocking up with several flags that he intended to sell.
“Ah, oya jathika kodiya vikunanawada nidhas davasata (Ah, you are selling national flags for independence day),” asked Serapina.
“Ow Miss. Meka vishesha davasak-ne okkama sri lankikayanta. Ma-math mage kotasa karanawa jathika kodiya osawanna, minisunwa pravardanaya karanna (Yes Miss, this is a special day for all Sri Lankans. I am doing my part in promoting the hoisting of the national flag by the people),” he replied.
“Mona samarumak-da. Api bohoma katuka jeevithayak-ne gatha karanne, ihala nagina jeevana viyadama ekka. Samahara pavul eka kaema welak-ne kanne davasakata. Monawada ithin egollanta samaranna thiyenne (What celebration! We are struggling with rising costs of living and some families having just one meal a day. What is there for them to celebrate),” noted Kussi Amma Sera.
“Godak denek-ge rassawal-uth nethiwela, mokada compani kada wetila thiyena nisa. Lanka ithihasaye narakama kalayak-ne. Avasanavantha lesa mae kale thama avurudu 75ka nidahasa avith thiyenne (Many people have lost jobs with companies collapsing. It is one of the worst periods in history and unfortunately comes when we mark 75 years of independence),” said Mabel Rasthiyadu.
After a long conversation, Aldoris left and after watching the trio, I ventured into the living room to answer a call. It was Kalabala Silva, the often agitated academic, who was calling.
After the usual pleasantries, Kalabala said he had read a worrying report in the Business Times (BT) referring to the collapse of small and medium scale businesses (SMEs) in the garment sector.
“Yes… this is a worrying trend,” I said. “The crisis has badly affected all SMEs whose moratoriums on loan repayments have also ended and they now have to pay up all their loans,” he said.
Last week’s BT report said Sri Lankan apparel workers, particularly SMEs, were returning to their villages due to lower wages driven by companies unable to provide overtime work (which workers depend on). Wage payments were also being delayed as cash flows suffered.
“Unlike the government that can print money to pay salaries of state sector workers, we cannot do the same, so the authorities need to intervene and assist the apparel industry, particularly the SME sector to sustain their organisations,” Sri Lanka Chamber of Garment Exporters SME Sector Secretary General Hemantha Perera told the Business Times.
The report said that though no workers have been laid off, the SME sector is also facing a 40 per cent drop in orders and has reduced the number of work hours from about 10-12 hours per day to 8 hours per day.
The report also focused on a new development – the second generation of entrepreneurs in this sector opting to migrate rather than go through the suffering their parents are facing today as a result of the current crisis. This would mean less investments into this sector by the next generation of entrepreneurs who prefer less risky jobs.
Apparel and textile exports increased by 9.56 per cent to US$5,933.52 million last year, compared to the same period of 2021, the Export Development Board (EDB) said in releasing the export data for 2022.
Although export earnings from apparel increased by 10.74 per cent to $5,482.82 million, earnings from textile exports declined by 3 per cent to $450.7 million during 2022 compared with 2021.
The EDB said exports of apparel and textiles decreased by 9.56 per cent year-on-year to $480.28 million in December 2022 against the same 2021 month.
Continuing the conversation, Kalabala said that with moratoriums ending (as stated by the Central Bank), businesses were facing a major crisis, particularly among SMEs and tourism sector businesses. Tourism is seeing some positive trends with arrivals in January 2023 topping 100,000.
“The IMF bailout loan is also hanging in the balance,” he said. “On the positive side, the US is lending its support to the Sri Lankan government to secure this loan as early as possible while India has already announced support in meeting the debt restructuring conditions,” I said.
Earlier in the week the International Monetary Fund (IMF) approved loans of $4.7 billion to Bangladesh for disbursements starting immediately, making it the first to secure such funds out of three South Asian countries that applied last year amid economic trouble.
A Reuters report said Bangladesh’s regional counterparts, Sri Lanka and Pakistan, are doing much worse economically but have not been able to get final approval for IMF loans.
Ironically, Bangladesh has come to Sri Lanka’s rescue lending $250 million in tranches from mid-2021 but this was just before the South Asian country witnessed its own turbulence in the economy, which compelled requesting the IMF for support. In 2021, Bangladesh’s foreign exchange reserves were close to $50 billion.
Sri Lanka’s economy is on tenterhooks with President Ranil Wickremesinghe calling for cuts in government spending. Taking a stroll to a nearby shop to buy some eggs for the preparation of lunch, I found that it didn’t have eggs, though it’s normally stocked with eggs.
“Harima amarui, biththara vikunan-na palanaya karapu milata (It’s difficult to sell eggs at the controlled price),” lamented the shopkeeper.
Thus I returned home empty-handed and reflected on how the simple shortage of eggs is a reminder of a crisis the country should not have faced as it marked (not celebrated) 75 years of independence!
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