South Asian apparel sector must create quality jobs

29 Mar '16

6 min read

Sri Lankan apparel prices are higher than those of competitors in most product categories, and its product portfolio is largely made up of higher-value, niche products. Average literacy in Sri Lanka is higher than in other South Asian countries, and a more skilled workforce also allows them to produce more sophisticated apparel products. Sri Lanka stands to gain significantly from increasing its apparel exports, particularly to the EU market.

Elasticity estimates highlight that a 10 per cent increase in Chinese apparel prices could increase Sri Lankan male employment by 8.55 percent and female employment by 7.87 per cent.

Sri Lanka could benefit from policies to diversify its export markets, attract additional foreign investment, and capitalize on its skills advantage by producing new, more sophisticated products. To help firms diversify end markets and export destinations for existing products, policy makers might consider more trade agreements with potential partners - foreign investment remains at 2 per cent of GDP, even five years after the end of armed conflict. Clear investment policies to portray stability and attract additional investment could also help. Finally, policy makers could position Sri Lanka as a regional apparel and textile trade hub, taking advantage of infrastructure and location.

The report said South Asia must create good quality jobs for a rapidly expanding young population and bring more women into the labor force. The apparel sector in South Asia is labor intensive, employs more women on average than other manufacturing sectors, and provides jobs that allow for the acquisition of skills. Despite these development benefits, the sector has not reached its full potential because of inefficiencies that affect its competitiveness. (SH)

Fibre2Fashion News Desk – India

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