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Sri Lanka’s Garment Makers Brace for 20% Drop in Orders

As Sri Lanka teeters on the brink of economic collapse, the country’s garment manufacturers are bracing themselves for 20 percent fewer orders, the industry’s leading trade group said.

In a statement released late last month, the Joint Apparel Association Forum (JAAF) warned of “serious negative consequences” if policymakers continue to drag their feet on the sweeping reforms required to put the island nation back on track. The crisis has brought about widespread food, fuel and medicine shortages, sky-rocketing inflation and mass protests calling for the president’s resignation.

The JAAF said that despite the apparel sector’s “outstanding resilience” in sticking to its production schedules, next season’s orders could see as much as a one-fifth reduction due to softening global consumer sentiment. To address the industry’s growing volatility, the government needs to engage with industry experts to develop a practical and apolitical economic recovery roadmap, it added.

“The need of the hour,” said JAAF secretary-general Yohan Lawrence, is to ensure that Sri Lanka maintains the confidence of its buyers in the face of unprecedented adversity. The last thing the country needs is an exodus of brands looking to de-risk their operations.

“For more than 30 years, including multiple global and regional economic downturns, the Sri Lankan apparel industry has meticulously built a reputation that reflects the highest levels of reliability, quality and sophisticated technical capabilities,” Lawrence said. “Owing to unprecedented national economic mismanagement, this sector, which has long served as a fundamental pillar to the Sri Lankan economy, is now under serious threat.”

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Any strategy to stabilize the economy, he said, must prioritize support to apparel manufacturers large and small. Employing 350,000 workers, Sri Lanka’s 1,000-plus factories supply nearly half of all merchandise exports and contribute 6 percent of the island nation’s gross domestic product. “We need sustainable, decisive solutions and we need them now,” Lawrence added.

Most critical is a stable energy supply to ensure operational continuity. Large Sri Lankan manufacturers that have embraced renewable power, in particular solar, he noted, have been able to ride out the worst disruptions by optimizing their energy consumption.

“There is potential to build on these initiatives over the medium term,” Lawrence said. “However, what can be done is limited if the government is unable to meet its obligations in terms of energy supply. Given the success of renewables, it is clear that the state-owned energy suppliers must also place renewed emphasis on such sources.”

The JAAF is also backing a demand from the Joint Chambers of Commerce to abolish the 20th amendment, which expanded the powers of the now deeply unpopular president in 2020. Eliminating this clause is the “first step” to overhauling Sri Lanka’s political culture, the organization said.

“All Sri Lankans, including those in positions of power today agree that the root of the nation’s economic woes is in its dysfunctional political culture,” Lawrence said. “In order to achieve meaningful economic recovery, we need political leaders willing to sacrifice their own interests in order to advance those of ordinary citizens. Without this systemic change, we cannot achieve the stability necessary to navigate our way out of the current crisis.”