ECONOMY-MAURITIUS: Port Louis Targets Neighbours for Clothing Exports

By IPS Correspondents Reprint | | Print |

Nasseem Ackbarally

PORT LOUIS, Oct 17 2006 (IPS) - Mauritius is eyeing other markets in Africa as part of its effort to rebuild export manufacturing of clothing. This includes targeting South Africa, which will be limiting certain Chinese imports in 2007.

The end of the Multi-fibre Arrangement (MFA), which had given certain developing countries preferential access to the U.S. and European Union clothing markets, caused a number of big factories and several smaller ones to close down in Mauritius.

Thousands of people, mostly women, were left unemployed.

Now, in a bid to boost export manufacturing, the industry will focus on markets in other African countries, such as Kenya, Tanzania, Uganda, Mozambique, Ethiopia, Zambia and Madagascar.

Enterprise Mauritius (EM), a government body, regards South Africa as an important market for shirts, T-shirts, pullovers and trousers. “We should now work to become the first alternative to China in this market,” said an EM official.

A gap for Mauritian exporters will open up with South Africa’s decision to limit certain Chinese imports from January 2007.

Mauritius is also working on the Asian front. It has already secured a quota of one million garments for the Indian market under a preferential trade agreement with India. Negotiations are also presently underway with the United States and Pakistan.

The Mauritian clothing and textile industry seems to be weathering the storm in the wake of the MFA. New factories have opened and investment worth 60 million dollars has poured in so far this year.

“What has been remarkable is that things are picking up in the industry. Industrialists who could not sleep last year because of a lack of orders are not sleeping this year because of too many orders,” Industry and Commerce Minister Rajesh Jeetah told IPS.

Exports stood at 942 million dollars in 2005 compared to 1.03 billion dollars in 2004. In the first six months of 2006, they reached a little more than 500 million dollars, suggesting a return to 2004 levels.

For the third quarter of this year, the net value of exports is 23 percent higher compared to the same period last year.

Following this trend, the textile and clothing sector should end the year with the overall value of exports being higher than last year. Economist Eric Ng Ping Chung is therefore expecting positive growth of 1.7 percent for the sector for 2006.

The Mauritian government has taken several measures, costing 1.6 million dollars, to restore the industry. These include refocusing the industry on a different market segment to increase export levels. Factories, market and product development and logistics have been restructured.

The government has also addressed access to finance and to markets. The latest measure taken is the creation of the Fashion and Design Institute to help the sector evolve towards a fashion industry.

This demands creativity and innovation, higher quality and value-added manufacturing, technical superiority, speed and product differentiation.

Enterprise Mauritius is focusing on the strategies of firms, their competitiveness, and the operating conditions for smaller enterprises. The aim is to enable them to develop new products and explore new markets.

The deputy chairperson of the Mauritius Export Processing Zone Association, Ahmed Parker, said the revival of the textile and clothing industry is happening in a context where prices are under pressure.

“European and American buyers are used to the low prices offered by China. Mauritius will have to follow the trend while maintaining the quality of its products, delivering on time and providing a good service to its clients,” he said.

The clothing and textile industry is one of the island’s four economic pillars, along with sugar, tourism and financial services. It was anticipated that the end of the MFA could destroy the sector.

Over the past four years, the industry shrunk by six percent in 2002, six percent in 2003, 6.8 percent in 2004 and eight percent in 2005.

Presently, the number of factories stands at 250, employing 55,000 local workers and 13,000 foreigners. In 1999, 91,000 workers were employed, falling to 77,500 in 2003, and 66,300 in 2005. About two-thirds of the workforce consists of women.

If the industry has benefited from government’s assistance, this is not always the case for the workers who have lost their jobs.

Some of the workers have received sums ranging from 162 to 194 dollars from the government to start micro-projects. However, thousands are still waiting to be paid – in spite of protests staged on the streets of the capital, Port Louis.

Take Basdeo Jhingree and Sweta Bassant, two factory workers laid off last year. “Our situation is darker because we have to pay back bank loans taken for housing purposes,” Bassant said.

“The kids have to study; we are still struggling to get a job. With so many unemployed around, it is very difficult to find jobs elsewhere, particularly for those who are older.”

As with many others, they are doing odd jobs like washing and cleaning at people’s homes, or selling small goods on the streets. Others have been introduced to poultry keeping by the Food Self-sufficiency Movement (Mouvement Autosuffisance Alimentaire, MAA), a non-governmental organisation.

“Many women who have lost their jobs have started small food businesses around the island…Others started poultry keeping and selling eggs in their vicinity so as to get some revenue,” MAA director Eric Mangar said.

Jane Ragoo from the Federation of Progressive Unions said workers have not been enabled to benefit from the reforms by moving into the upper segment of the industry.

“When factories are modernised, do we look only at equipment, or also at salary and working conditions?” she asked.

The problems of low wages and a lack of benefits also persist. Workers still work 55 hours a week for less than 90 dollars with no job security, no lump sum at the age of 60, like in other sectors – and older women not being employed, Ragoo emphasised.

She also denounced industrialists who need personnel but call local workers lazy so as not to hire them, as they prefer to bring cheaper foreign workers to the island.

The decline of Mauritius’ clothing and textile industry happened for several reasons. With the liberalisation of trade, global competition in clothing production became stiff as low-cost producers such as China, India, Indonesia, Bangladesh and Sri Lanka emerged.

Several weaknesses contributed to the industry’s vulnerability. These included high labour costs coupled with low productivity levels. The lack of skilled workers meant a mismatch between demand and supply in the labour market.

The sector has also been criticised for an excessive reliance on the production of T-shirts, shirts, pullovers and trousers.