UAE: Workers, Businesses Worry as End of Export Quotas Nears

By Feizal Samath Reprint | | Print |

Feizal Samath

DUBAI, Apr 15 2004 (IPS) - At the American Garment factory in Sharjah, an emirate about 25 kilometres from here, a few Sri Lankan workers dry clothes and chat while idling in the small factory compound. There are no sounds of machines running.

Inside the dimly-lit corridors of the office, a few people, some looking tired and dishevelled, are at work.

”The Indian owner of the factory will come back in a week and close it,” said a Sri Lankan administrative manager, who declined to be named.

As costs exceeded revenues, the factory had progressively reduced the number of workers, who come from Sri Lanka, from 50 to 35, he said. Garment industry sources in Dubai, the commercial hub of the United Arab Emirates, said the factory had, for all purposes, actually already closed down, but the workers did not know this.

A number of small factories like American Garment are closing down rapidly as the fledgling garment industry in the Middle East, built on textile quota concessions in the United States about 15 years ago, struggles to cope with rising costs – as well as the impending phaseout of these quotas given by the United States.

The U.S. quota regime ends in December 2004, a change that affects mostly small factories that do not strictly adhere to labour compliance standards by U.S. buyers because of high costs involved in infrastructure development.

There are some 3,000 workers from Sri Lanka in Dubai. Unofficial estimates say there are some 100,000 Sri Lankans, mostly women, working in garment factories across the UAE and the rest of the Middle East.

Sri Lankans, mostly women, make up the bulk of the workers in garment factories in the region, where they are set up mainly to take advantage of export quotas to the United States available to the Middle East.

Already, the period leading up to the phaseout has seen factories trying to step up competitiveness and productivity by having workers put in longer hours.

In some factories in the UAE, IPS discovered, workers put in 10-hour work days, six days a week when the law only permits a work week of eight hours a day and 48 hours per week per worker, with Friday off. Workers are paid a minimum of 500 dirhams (136 U.S. dollars) a month excluding food, accommodation and travel to and from home for foreigners.

Garments buyers, who declined to be named, said workers in factories outside special incentive zones would be the ones who would suffer during the transition because owners either shut down or cut costs to try to get around stringent compliance standards.

”Most garment factories take overbooking and can’t keep to targets. So workers on put on endless 24-hour shifts,” one buyer said.

Workers, interviewed in their factories, said they were happy with the work and living conditions and looked forward to returning home with some savings. However, many of them, fearful of losing jobs, were unable to talk freely about the dark side of factory work.

For many workers it is a case of ”from bed to machine, machine to bed”, says a Sri Lankan buyer, describing the life of a foreign garment factory worker.

Many of the garment factories here are now expected to relocate to Jordan, the only country in the region to be unaffected by cuts in U.S. textile quotas as it has special duty free and quota free access to the United States.

It has been attracting new garment investments due to this special concession from the U.S. government since the mid-1990s, after a peace pact between Jordan and U.S.-backed Israel.

Some employees like Parvan, a young Bangladeshi woman, kept their jobs when their factories moved from places like Bahrain to Jordan. ”The management is good they have transferred us to Jordan,” she told IPS on a flight to Amman from Dubai.

Likewise, ”already we have seen a new wave of investors from Turkey,” said Saleh Diabat, manager of two Qualified Industrial Zones (QIZs) in Jordan.

But Zarook Ansar, general manager of the American Jordanian Company for Apparel, said that although Jordan is also feeling the uncertainty in the industry although factories are moving there.

”There is going to be a big reshuffle when the quotas end. Factories are finding their feet in the region not only because of the textile quota issue but also because of a major threat coming from China,” he said at his comfortable office at the QIZ in the Jordanian city of Irbid near the Iraqi border.

Ansar, a Sri Lankan with wide industry experience in Madagascar, said China’s wages are three times lower than Jordan’s and this poses a major challenge to the garment industry here. The minimum wage in Jordan is 125 U.S. dollars per month.

But Nandana Lokuwithana, a Sri Lankan businessman with two garment factories and other interests at the Sharjah Airport Free Zone, says Dubai may be better prepared to face up to the end of textile quotas than Sri Lanka – where bulk of garment workers in the Middle East are from.

This, he adds, is because of the work in the UAE has productivity, speedier delivery of targets and the country has less holidays.

”Even though the cost per (foreign) garment worker here is about 250 dollars a month against about 100 dollars in Sri Lanka, we can still survive the change,” he said, speaking at his Nilona Garment factory at the spacious Sharjah zone.

In Sri Lanka, industry officials say some 100,000 to 150,000 workers may lose their jobs when U.S. garment quotas end this year.

Most of the small factories hiring 100 workers or less will be affected as they do not have enough funds to meet the strict requirements of U.S. buyers in terms of upgrading machines and meeting labour standards, said Nihal Seneviratne, who is from an association representing small garment factory owners.

More than 60 percent of Sri Lanka’s garment exports, a key dollar earner, go to the United States. (END/IPS/AP/MM/LB/IF/FS/JS/04)