Reinhold Plate
Women Working in the Free Trade Zone:
The Textile and Garment Industry in Sri Lanka.

The development of the textile and garment industry is an important step in the industrialization process of developing countries. The accessibility of raw materials, the availability of a large unemployed labour force and the low capital needs of the industry, combine to make the textile and apparel industry more attractive for developing countries both as a substitute for imports and as a major source of foreign exchange. In Sri Lanka, the sector is important to the national economy in terms of output, employment, foreign exchange earnings and support for the export-led development strategy. Since 1986, the production in the textile and garment sector has more than doubled. The annual growth rate exceeds that of other indutrial branches by more than 20 per cent. Over the last six years, the textile and garment sector has accounted for 30 per cent of the country's total export earnings and the industry continues to be the largest source of foreign exchange. In relation to the textile and garment industry, the Greater Colombo Economic Commission (GCEC) plays an important role. Of the 350,000 jobs in the textile and garment industry, a further 200,000 jobs exist within the GCEC firms. An additional 150,000 jobs are indirectly linked to the latter. The numbers employed in the spinning, weaving and finishing sector is estimated at 64,000. The textile and garment sector is, as a result, the largest employer in Sri Lanka.

Page Top

Formal and Informal Sector in the Textile and Garment Industry

An accurate estimate of the total employment in the textile and garment industry is not possible as one must differentiate between the informal and formal sectors. The garment industry has both a formal sector and an informal sector. The formal sector includes export-oriented garment enterprises and medium and small-scale units producing garments for the domestic market. The informal sector is characterized by very small firms and household units scattered throughout the country.

The manufacture of garments is exclusively a private sector activity producing solely for the domestic market. The public sector, however, dominated until recently the spinning, weaving and finishing sectors (in terms of quantity). The picture changed in the latter half of 1991 with the privatisation of public sector mills and powerlooms under the government's privatization programme. The Tulhiria Textile Mill has, for example, been sold outright to a South Korean company and the existing foreign managers of Pugoda Mills have acquired controlling shares in the mill. All twelve public sector powerloom firms, except two, have been privatised. Competitive bids have been invited for the remaining two units.

The spinning, weaving and finishing sector could be classified into three categories: mill, powerloom and handloom. The mill sector includes the four integrated mills of public sector (recently privatised), and the two integrated mills of the private sector. A further 62 weaving and knitting mills of the private sector and the 7 textile units of the Greater Colombo Economic Commission (GCEC) also belong to the category of large-scale producers.

The powerloom sector consists of the privatised public sector powerloom projects, the private powerlooms and the two remaining public sector powerloom projects to be privatised shortly. The handloom sector comprises the 70 handloom centres under the Department of Small Industries and the 25,000 handlooms under the Department of Textile Industries.

The spinning sector was dominated, until recently, by the public sector while the private sector was dominant in the weaving field. Wide fluctuations in production is observable in the spinning industry. This is attributed to low capacity utilisation caused by labour unrest and political disturbances.

Page Top

Measures for the Promotion of Exports.

Sri Lanka has, since 1977, adopted an export-led growth strategy. Import, foreign exchange and administrative controls are being liberalised. The Sri Lankan Rupee has been drastically devalued and is now floated against a basket of currencies. The tariff structure has been rationalised by lowering tariffs, quantitative restrictions have been removed and the number of tariff bands reduced to four. Greater reliance has been placed on the private sector for economic growth. The existing public sector enterprises are being privatised. The government's involvement in direct economic activity will be confined to the provision of infrastructure facilities.

There are a number of ministries and agencies concerned with the development of the textile and garment industries. The Ministry of Textiles and Handloom Industries is in overall charge of the sector outside the Free Trade Zones. The textile and garment industry in the Free Trade Zone is within the purview of the Greater Colombo Economic Commission. Although the country has, since 1977, pursued liberal economic policies, the textile and garment industry continued to be heavily protected by high tariffs and quantitative restrictions. Thereafter, tariffs were gradually reduced until 1991, when the country's tariff structure was rationalised.

In order to remain competitive in garment exports after the expiry of the bilateral agreements negotiated under the Multi-Fibre Arrangement, the government is pursuing a policy of backward integration. Furthermore, since the country's garment exports constitute low-cost utility items which are subject to severe competition from low labour cost countries, plans are afoot to diversify its exports to cover non-quota garments and to move up the market by manufacturing quality garments and fashion garments.

As backward integration of the garments export sector is highly capital intensive, the government is offering foreign investors a variety of investment incentives. The handloom sector has declined following trade liberalisation and the Ministry of Textile and Handloom Industries has prepared a 5 year development plan to revive, modernise and expand the sector by establishing handloom export villages throughout the country. The GCEC has recently announced attractive incentives for foreign investment in the field of fabric and handloom textile manufacture.

Page Top

Wage Structure and Development of Skills

The direct costs of salaries and wages in Sri Lanka are much lower than those in other Asian countries. Salaries and wages differ from firm to firm depending on the size of the firm, its efficiency and the quality of the products manufactured. The current rates are as follows:

Industries within the Greater Colombo Economic Commission pay higher wages than their counterparts. A GCEC firm employs on average about 1,000 workers. Wages and salaries in firms outside the free trade zones are at the lower end of the scale given above.

Training and further training facilities are of great interest to the export industry. The most important knowledge, required by the industry, is imparted by public institutions. The University of Moratuwa and the Open University of Sri Lanka conduct, for instance, degree, diploma and certificate level courses on the subject of textiles and garments. The "Textiles Training and Services Centre" provides training for middle and lower level managers. The "Clothing Industry Training Institute" provides 24 training courses for personnel employed in the garments manufacturing industry. The courses range from simple machine operations and machine mechanisms to production management diploma courses in clothing manufacture. The "Handloom Development Centre" assists in design development and productivity improvement. In the private sector, "Sewing Machine Training Centres" have mushroomed in various parts of the country. Producers of garment making machinery also provide technical assistance in the use and maintenance of machines. Most garment firms lay emphasis on on-the-job-training to develop skills. Despite these very good training facilities, shortages of trained personnel still exists in various fields. This is probably due not only to inadequacies in existing training facilities and but also to the government's policy of regional dispersal of garment manufacturing industries. The textile and garment enterprises within the Greater Colombo Economic Commission attract trained personnel through their better wages and working conditions. In addition, on-the-job training provided by these enterprises appears to be of a higher quality, due to the technological expertise and manufacturing experience of foreign partners in these firms.

Page Top

Women Working in the Free Trade Zone

More than 85 per cent of the employees in the free trade zones are women. Most of them are young, unmarried and are employed in a factory for the first time in their life. They hope, moreover, to have well paid and lasting employment in the free trade zones. As a rule, their hopes are, however, not fulfilled.

Katunayake is one of the two free trade zones in Sri Lanka; it was established in the late '70s and employs at present about 60,000 workers. More than 80 per cent of these are women, whose entering age is between 18 and 25, and they come from rural regions. Their precarious living and working conditions have resulted in repeated spontaneous activity of the workers. Many of the women are housed in private accommodation in close proximity to the free trade zone: cooking and washing facilities are insufficient and in desolate conditions, and often forty women have to share one toilet, kitchen and well. The Greater Colombo Economic Commission is in charge of the administration of the free trade zone and ordered a study on the social and economic problems of the workers. This study, entitled "A Report on the Socio-Economic Prob-lems of the Workforce at Katunayake", was published in June 1990. The author of the study, Mr. T. Hettiarachchy, has collected some important results in his summary "Some aspects of social problems re-lated to export promotion", the main points of which are given below.

In order to understand the problems relating to the situation in Sri Lanka, it is necessary to probe a little deeper into the problem of export promotion and drastic export expansion. Since the growth of industrialism in Europe the search for cheap labour, particularly when the industry was labour-intensive, persisted as a way of advancing profits. Search for cheap labour is more pronounced in the industries which are both very competitive and labour-intensive such as textiles, garment manufacture and food processing. Thus the recruitment of female labour into the export processing industry is supposed to be another stage in the long search for cheap labour. The history of the development of capitalist industries reveals that textiles, garments, food processing and more recently electonics have traditionally utilized female labour. Since the opportunity cost of female labour has always been lower than that of males, particularly in the Third World, industrialists preferred female labour in order to enhance their profits. Cheap labour remained one of the primary concerns of multinational enterprises which governed their decision with regard to the physical location of industries. As a result countries with cheap labour, a high level of unemployment and sufficient natural resources have been selected by multinationals as locations, particularly, for labour-intensive industries.

Insufficient wages paid to the workers in the Export Processing Zones (EPZ) is one of the primary problems connected with EPZs in Sri Lanka. Even though the minimum salary paid is Rs. 1000.00 per month, the take-home salary of many workers is about Rs. 150.00 less than the above figure. The problem is more acute with probationers whose take-home salary is little over Rs. 700.00. From this salary, between Rs. 100.00 - 125.00 is paid to the boarding house and about Rs. 500.00 is spent on their daily expenses on food. What is left, is for many workers, especially during the probationary period, insufficient to even clothe themselves decently. In fact many workers bring rice and coconut from their parental homes. No commentaries are necessary to describe their poverty. Malnutrition is quite evident and what they wear at boarding houses is no better than rags.

Accomodation for Workers

Almost all the workers at Katunayake Export Processing Zone, except the very few who travel from their homes, are boarded in close proximity to the zone. Because of the uncertainty of the public transport system, most workers prefer to stay in boarding houses very close to the zone. As a result, the area surrounding Katunayake, within a radius of about 1 km, is covered with boarding houses.

The first category of boarding houses, i.e. those that are built solely for the purpose of renting out to the workforce in the Export Processing Zone are often no better than poultry sheds. They resemble estate line rooms of the past, the only difference being that a room of 10x8 feet, 10x9 feet, houses ten or more female workers. These boarding houses are built in units of three to four rooms. Occasionally these rooms have an extended eve which provides a kind of shelter where a bench is kept for the boarders to sit. The room has a small window but considering the number of boarders sharing a room, ventilation and sunlight allowed in by a window is grossly inadequate for healthy living. This is more so as the working girls close the window at night for fear of thieves and intruders. For about 30 - 40 boarders a kitchen is provided outside - usually a small shed with about ten fire places.

There is no furniture inside the rooms which serve as the only place the boarders have for sleeping, dining, sitting, storing personal belongings, the leftover food and even firewood. Many boarding houses offer a mat to sleep but rarely a pillow. In other places both these items are bought by the boarders. During daytime one can find rolled up mats, and boxes or suitcases of girls kept side by side on the floor. Dirty clothes are seen hanging on strings running from wall to wall. The stuffy, foul smell emanating from unwashed clothes and slippers is often nauseating.

As there is no pipeborne water supply system in the area where most of the boarding houses are located, well water is the main source of water supply. Well water was often found to be polluted due to the inadequate distance between the well and the soakage or cesspit, non-availability of a surface drainage system within the site, and the failure to provide the well with a protective wall and a cemented pavement around it. The same well is also used both for drinking and bathing.

Even earlier living and sanitary conditions of the Export Processing Zone were cited as factors causing many health problems to the workers. It is stated that workers cook once a day and keep the same for three meals without any refrigeration. According to medical opinion, such habits (cultivated out of necessity) lead to indigestion and bowel diseases. They are also compelled to buy (cooked) food from vendors. The hygienic condition of such food is, of course, highly questionable.

There are other aspects to the problems connected with boarding houses. Boarding house masters, like many other members of the public, regard the workforce only as a source of income. It is up to anyone to devise his or her own means of exploiting this source of income using his or her own ingenuity. Boarding house masters have capitalized on this situation. Apart from being boarding masters, they have also turned into suppliers of grocery items to the boarders. There are over 600 groceries within a radius of 1/2 to 2 km of the free trade zone and the majority of these groceries are owned by boarding house masters. The important point to be stressed in this respect is that the occupants of a particular boarding house are more or less compelled to buy grocery items from the grocery maintained by the boarding house keeper. The price levels in these places are 20 - 25 per cent higher than on the open market.

Page Top

Living in the Katunayake Free Trade Zone

Manike was a woman worker who was dismissed for writing a poem in a newspaper on the grounds that she had told lies about the factory. After months of campaigning - involving the different centres, as well as a national and international campaign by the paper - Manike was reinstated with full back pay.


I awake early morning at 4.30 a.m.

I have to kindle the fire

Having washed my face, I gulp down some tea

I leave for work early morning.

I start work at 7 a.m.

The supervisor demands the production

I regret my inability to meet this target

She scolds us for this.

At 10.30 a.m. we get a sip of tea.

The tea contains no flavour, no sweetness

We drink it to quench our hunger

We tolerate these because we are poor.

I came to Katunayake because I was without work

I came to the Free Trade Zone to work

I worked at Star Garments

Now I am tired and disgusted with the job.

The other day I fell sick.

But I was not allowed to leave the factory

I know that one day I will have to work

- even through sickness.

I will surely fall dead, at Star Garments.

I work throughout the month

I am paid Rs. 800 for the month

An attendance bonus of Rs. 72 is paid

We are paid with no further allowances.

At 7 a.m. I sit at the machine

By 8 a.m. the supervisor is already at my side

She asks me what my production is

I tell her only the amount I can give

I often get a pain in my chest

The supervisor asks me to go to the sick room

I can stay there around quarter of an hour

I come back again and sit at the machine.

My mother does not know how much I suffer.

Only I know how much I suffer.

I leave in the morning and come back at night.

I suffer with the pain in my body.

We are not given any leave.

Leave is allowed only in emergencies.

That leave is also granted after much argument.

We who are poor are made to suffer so much.

My mother who fed me with her own milk.

My father who worked so hard to bring us up.

My teacher who gave me the knowledge.

To them I pay my respects.

© Friedrich Ebert Stiftung | technical support | net edition fes-bibliothek

Previous Page TOC Next Page