US embassy cable - 05COLOMBO1668

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, Maldives 
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