Amid delay in enacting the Special Economic Zone (SEZ) Act, they have come up with the fresh idea to ensure smooth industrial relation in readymade garment (RMG) sector though GPZ, where workers can be hired under contract basis as per the needs of the producers. [break]
Garment Association-Nepal (GAN) - the umbrella organization of Nepali garment producers and exporters - is planning to accommodate about 20 garment factories in the processing zone.
“We are establishing GPZ, where we are planning to accommodate about 20 garment factories, as a stop-gap measure until the SEZ Act comes to effect. All garment entrepreneurs are positive to set up special cluster area for garment processing,” Udayraj Pandey, newly appointed president of GAN, told Republica. “The concept can be easily materialized if the government is supportive to it.”
The enforcement of SEZ Act is getting delayed because the SEZ Bill is gathering dust at parliament.
Pandey said GAN is holding formal discussions with different labor unions in the coming two weeks to expedite the process of opening GPZ. “The proposed processing zone will allow employers to recruit workers under contract basis. We are also requesting the government to provide soft loan to set up infrastructure at the garment cluster,” Pandey added.
Garment entrepreneurs expect that they will not have to face frequent labor strike, one of the major factors behind the poor performance of the RMG sector, once the processing zone is established.
At present, tea and sugarcane producers have been practicing the job contract system where producers are free to adjust the number of workers in line with the work pressure in the factories.
Pandey said GAN would give equal priority to markets in India, Europe and US. “Along with the markets in European and US, the Indian market is equally important for us in terms of export potentials. That is why we are planning to interact with businessmen in New Delhi, Mumbai and Allahabad to promote garment exports to India,” he added. RMG export to India is estimated at about Rs 1 billion a year.
Laborers, who used to work in the garment industry before it witnessed unprecedented slackness, are also showing desire to rejoin their jobs if the garment factories resumes operation, according to Pandey.
The number of garment factories in the country has plunged to just about 15 from 250 recorded in 2000 when this sector was giving employment opportunity to more than 100,000 persons. However, the sector is on the verge of collapse, thanks mainly to long running political instability, labor unrest and phase out of the US quota.
Though the export of Nepali RMG is rising, the volume of institutional exports to the southern neighbor is still not significant. GAN is also preparing to use diplomatic channel by mobilizing Nepali mission in India for the promotion of Nepali RMG sector.
“We are seeing a vast market in India where the demand for branded clothes is rising due to rising middle-class population,” Pandey said, adding, “Also the minimum wage of workers is rising, making the cost of production higher as compared to Nepal.”
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