TEXTILES AND APPAREL SECTOR UPDATE-MALDIVES

UNCLAS COLOMBO 001668 SIPDIS STATE/EB/TPP/ABT EDWARD HEARTNEY STATE FOR SA/INS DEPT PASS USTR ABIOLA HEYLIGER COMMERCE/ITA/OTEXA MARIA D?ANDREA GENEVA PASS USTR E.O 12958: N/A TAGS: ECON KTEX ETRD EAID MV ECONOMICS SUBJECT: TEXTILES AND APPAREL SECTOR UPDATE-MALDIVES REF: (A) STATE 146213 (B) 04 COLOMBO 1605 ¶1. Per ref (A),information for Maldives follows: ¶2. The apparel industry in Maldives has disappeared following the expiration of the MFA. The industry was comprised entirely of foreign investors, mostly from Sri Lanka, seeking quota advantages. Most started closing down operations gradually in preparation for the end of the MFA and by the end of 2004 there was just one operator left. The last operator closed down in early 2005. However, the effects on the economy are expected to be negligible since the apparel industry yielded little value added and imported all inputs, and most of its workers, from Sri Lanka. The main effect is a 4 percent loss of government revenues derived from land rentals. In addition, about 240 Maldivians have lost their jobs. Since factories were located in 2 atolls, retailers and service providers in these regions have also experienced a drop in business. -- 2004 2005 -- - thru June Total industrial production (USD MN) NA NA Total textiles/apparel prod (USD MN) NA NA Total apparel exports USD Mn 31.8 0.6(a) Textile/apparel share of total exports 26% - Total manufacturing employment NA NA Total textile and apparel employment 237(b) 0 (a) reflects exports in January 2005. No exports have taken place since then. (b) There were 237 local employees. In addition, addition, there were about 1250 expatriate workers attached to these factories. NA: Not available LUNSTEAD