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South Africa : Textile competition post MFA will hit African countries most
31st December, 2004
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Least Developed Countries from Africa such as Mauritius, Lesotho, Madagascar and Uganda whose fledgling textile industries had over the years barely come up to what they are today in the American and European textile and apparel markets will be hardest hit as the quotas end today.
China, India, Pakistan and Thailand to a large extent are hoping to pick up major textile share of the global market next year, forcing African countries to lose out in the longer run for the market share of the textile pie, say analysts.
"If you look at a study done by the WTO in September, it shows that India and China will grab about 80% of the world market and the remaining 20% will have to be shared by the rest of the world," said Narainduth Boodhoo, duty director of Mauritius's trade policy unit.
"Then there are other competitive suppliers like Indonesia, Thailand and Pakistan, so it is quite clear that these countries will share the remaining 20%.
"So what is there left for countries in Africa like Mauritius?" he added.
Anticipating a major export earner in textiles business, the tiny Indian Ocean island of Mauritius shifted its economy solely based on sugar production to garment production.
The WTO agreement provided the necessary fillip to the nascent garment industry of the country ensuring its products to sell to the lucrative American and European markets.
Besides fueling economy, the industry provided employment and subsistence to the local populace.
The picture changed drastically since last two years in anticipation of the end of the quota system, as dozens of textile factories shut shop or moved operations back to the countries of origin, which set up in Mauritius to take advantage of the agreement have closed down.
Over 10 000 persons lost their jobs, raising the island's unemployment chart at a record 10 percent.
According to analysts, in excess of 27 million people worldwide, mainly women, will lose their livelihoods, due to the end of the quota regime.
Way out as per analysts is diluting the impact of quotas through ‘surrogate’ means (FTA) so that the largely poverty-stricken African population has means to survive.
Financial aid in modernizing, restructuring and aim for niche markets through innovation of the regions textile and garment industries can help it say analyst who paint a rather bleak picture in the near future.
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