Owing to the Multi Fibre Arrangement (also known as the Agreement on Textile and Clothing), local exports boomed, beginning in the 1970s. Over time however, the number of garment factories fell from 800 to 200. The workforce also dropped from 350,000 to 250,000.
But the worldwide crisis is now having devastating effects on the FTZ with waves of closures and layoffs. In fact since July 2008 some 40,000 workers have lost their job and many factories have already announced that they will close by the end of the year.
For example, Cinotex, a garment manufacturer that has been in Katunayake for the past 25 years, let 3,000 of its workers go, but asked them to resign voluntarily to avoid having to pay compensation. The same happened last August to Jakalanka which shed 2,000 jobs. West Apparel cut about 1,000 jobs. MS Apparels, with plants in Liyanagemulla and Katunayake, told 1,300 of its people that they were out of a job.
Fr Sarath Iddamalgoda, who heads Sramabimani Kendraya (Centre for Labour Dignity), a labour NGO, told AsiaNews that the situation “clearly reflects the crisis that is gripping the country.”
And losing a job is bad enough, but when they are employed, workers have to put up with dismal working conditions. Whether young or women, often from faraway rural villages, workers in the FTZ have to live in conditions Father Iddamalgoda calls “appalling,” very often “without drinking water or sanitary facilities.”
“There is no authority responsible for their welfare and in times of trouble there is no one they can turn to,” the priest said.
FTZ workers are not unionised, and cannot turn to anyone to defend their rights. Because they are constantly in fear of losing their job, they have also shied away from setting up their own plant-based unions.
So far Sri Lanka’s government has not come up with any plan to help rescue the ailing sector, nor has it done anything to help laid off workers.
In fact many observers now expect quite a few workers will find a nasty surprise when they go back to work after New Year celebrations (14 April according to the Sinhalese and Tamil calendar), namely closed plants and no more jobs.