JAAF demands immediate solutions, end to Government’s procrastination


In a recent statement, the apparel industry has urged all stakeholders to put aside differences and work together to resolve the current crisis, which has imposed severe hardships on people and hampered the economy. If the current macroeconomic crisis continues for longer without taking urgent action to address it, the social and economic consequences imposed upon Sri Lanka’s people will be incalculable, the industry warns.

The country is still recovering from the adverse effects of the worst pandemic in decades that erased years of growth.

The Joint Apparel Association Forum (JAAF), the apex body of Sri Lanka’s apparel industry, says that Government’s inaction in finding and implementing a constructive solution to the current crisis urgently risks the imposition of potentially heavy costs the country will continue to pay over the long-term, including access to global markets.

Apparel is Sri Lanka’s single largest foreign income earner, contributing 6% to the country’s overall GDP. The sector provides direct employment to 350,000 people and to another 700,000 indirectly.

“The current crisis has been brewing for several months, and the Government’s procrastination has created considerable hardship for ordinary people. Power and fuel outages have already led to the shut-down of many small establishments and escalated the cost of production for others.” Efforts to stifle peaceful protests have precipitated a political crisis, further complicating the situation, JAAF adds,” said a JAAF spokesperson.

“Before the situation gets worse, we require immediate, decisive action to implement workable short and medium-term solutions to critical challenges. Given the magnitude of the crisis, all stakeholders in the country’s welfare and the people’s well-being should work together in the larger interest of the people and the nation,” the spokesperson emphasised.

JAAF fully supports the immediate appointment of financial and legal advisors to commence discussions with Sri Lanka’s creditors. This will allow debt servicing obligations to be paused, relieving the pressure on the system. Parallelly, Sri Lanka should engage with the IMF as a matter of urgency to seek bridging financing for essential imports – particularly for fuel, LPG and medicines. Seeking the assistance of the World Bank to reallocate unutilized funds from existing projects towards emergency relief programmes can also be an immediate safety net to those most affected by the crisis.

The crisis is hurting Sri Lanka’s international reputation as a reliable sourcing destination and exporter; buyers of the country’s merchandise exports (apparel is almost half of that), investors and business partners are getting worried.

“It will be a steep, uphill battle to retain buyer relationships, which have been built with great effort over decades. We simply cannot afford to lose even a single one of these relationships. The negative impact on the industry and the economy and the export sector will be almost catastrophic, and lead to loss of livelihoods and employment, and limit the country’s ability to fund essential imports, and badly damage its access to long-term external finances,” the spokesperson said.

Extended power cuts and inconsistent adherence to announced power interruption schedules have disrupted production planning and manufacturing, most severely impacting small and medium enterprises (SMEs). The mandatory conversion of foreign exchange is complicating raw material imports, as banks are unable to meet their commitments to apparel exporters.

Joint Apparel Association Forum (JAAF):

The Joint Apparel Association Forum is the apex body which guides Sri Lanka apparel towards its ultimate goal of being the world’s number one apparel sourcing destination. JAAF represents five associations that cover supply chain partners, the export-oriented apparel manufacturers, buying offices and representatives of international brands in Sri Lanka.