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SRI LANKA: Halt in EU Tariff Scheme Gives Workers the Jitters

Amantha Perera

COLOMBO, Feb 25 2010 (IPS) - For garment factory workers like Anoma Piyaseele, the European Union’s (EU) concessionary tariffs for imports from Sri Lanka meant little more than a vague term for policymakers to deal with – until news came that they would be suspended soon.

As it is, Piyaseele says, she is not sure whether this preferential scheme – officially called Generalised System of Preference (GSP) Plus that has helped Sri Lanka continue to be a major exporter of garments — had in any way been beneficial to her thus far.

“We did not get any bonuses or pay increases because of GSP Plus,” she said. She and her co-workers – the overwhelming majority of workers in the textile industry are women — thought GSP Plus was a loan to this South Asian island nation.

But after the EU announced on Feb. 16 that GSP Plus would be temporarily suspended from July onwards, Piyaseele fears that this change would not only cut down her already small pay but take away her job as a machine operator in a textile factory at the Katunayake Free Trade Zone (FTZ).

“Life is hard, very hard,” the 26-year-old Piyaseele told IPS in an interview. Hailing from the hilly town of Nuwera Eliya, about 200 kilometres from Katunayake, Piyaseele has spent the last seven years as an FTZ worker.

Katunayake is the largest and oldest of 13 such FTZs in the country and provides employment for over 100,000 people, the bulk of them women.

Piyaseele makes about 12,000 Sri Lankan rupees (110 U.S. dollars) a month and together with her husband, with whom she shares a 10-by-15 feet room, they make about 25,000 rupees (230 dollars).

“I have to work 11 hrs a day, six days a week, and by the time we get off work it is around 8 pm,” she said. “Then I come back to the room and we cook. It is not easy to save anything if we eat outside.”

She and her husband, who have been married two years, want to return to her village, but do not have enough savings or income prospects there to move back. “We want to build a house, but we don’t have enough savings to do that. We will have to work for some more years,” Piyaseele said.

GSP Plus assured a 10 percent duty waver on EU imports from Sri Lanka, so its suspension could have a telling effect on the country’s exports and in turn, the mostly women workers in the textile industry. Orders in the textile sector were already hit by dampened demand from western markets due to the recession in 2009.

Between 270,000 to 300,000 people work in the textile industry, according to government estimates. It is the biggest employer in the manufacturing sector and among the country’s largest net export earners, along with overseas workers’ remittances and tea.

The EU said the suspension was necessary because it was of the opinion that Sri Lanka had contravened human rights conventions that allowed it to benefit from GSP Plus.

In 2008, the EU became the single largest market for Sri Lankan exports with a total value of 1.6 billion dollars, according to the World Bank. The GSP Plus concession was worth over 100 million dollars in 2008, EU officials say. Piyaseele’s fears are shared by other women workers in textile factories who come from rural villages, such as Dulani Wasana and Anusha Kumari. Wasana, a 27-year-old widow with two children, came to work in the trade zone after her husband’s death. Her meagre wage is between 10,000 to 13,000 rupees (95 to 120 U.S. dollars), depending on the number of days she puts in.

She is working toward a very clear goal – the completion of the house she and her husband were building in her native village when he was killed in an accident. “It is difficult to save. I have to spend on the kids’ education, food, my lodging. I haven’t even recommenced the work on the house,” she told IPS. Wasana first heard of GSP Plus last year, when there was talk of it being scrapped. She says that she was unaware of any details of the tariff concessions, but now fears that her job is hanging by a thread. “As it is, I have to cut down on something new every month to save. It can be the phone bill, food, or something,” Wasana explained. She says she goes home to her village only twice a year, for the traditional new year and Christmas, in an effort to save money. “If there is an emergency, I try to do the journey overnight, so I only lose one day of work,” she added. “I really don’t know much about GSP Plus or what it gave us,” said Anusha Kumari, a 29-year-old garment factory employee from the same trade zone. “But my fear is that jobs will be cut, pay will be reduced and the reason would be no GSP Plus.” Activists who work on behalf of and among factory workers say that for a concession worth 100 million dollars, very little is actually known by the these workers about GSP Plus.

“It is worth over one billion rupees a year, but the normal machine operator or a line supervisor knows next to nothing about it,” said Achila Mapalagama, who heads Stand Up, an activist group based at the Katunayake zone.

Mapalagama says that part of this ignorance is due to the fact that benefits from the concessions had not reached the workers. “The workers did not get any special benefits from GSP Plus. But ironically, its absence could hurt them,” Mapalagama pointed out.

Meantime, the EU says that Sri Lanka can seek a review of the decision to suspend GSP Plus. But the Sri Lankan government has stated that the textile industry is resilient enough to withstand the loss of GSP Plus.

Neither statement has eased the concerns weighing down on hundreds of thousands of the country’s textile workers.

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