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