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