The industry that entered in the country in 1984 as a spillover impact of quota in India reached the point of no return from demise during the year -- sadly due to failure of the government and manufacturer to straighten internal problems and also due to the lack of facility in the US. [break]
Through the first 16 years of journey, the industry with over 1,200 active production units in 2000 occupied about 7.2 percent share of the total manufacturing sector, earned one-third of the total export income, witnessed investment climb to Rs 6 billion and directly employed 90,000 people, supporting livelihood of 450,000 persons.
In the new millennium, however, labor stir, instability, extortion and threats to industries started to add cost of production, contrary to the actual need of the industry, especially after the US extended duty-free facility to competitors in Caribbean and Sub-Saharan countries (2002) and quota phase out (2005). This started to take toll on the industry.
Garment Association Nepal (GAN) had made clear that only three measures can revive the industry -- establishment of Garment Processing Zone (pushed since 1999) that lowers production cost; an order-based hiring system (sought since 2007) that frees manufacturers from undue labor cost and stir; and duty-free-entry facility for Nepali garments in the US (lobbied for since 2005).
But as government turned deaf ear to these demands, the industry faced a sharp meltdown. Entrepreneurs started to fold industries and massive lay off hit workers. Today Nepal has only one firm exporting garment to the US. A dozen other are trying to survive by turning their focus to the Indian market.
Where are the exporters?
Of the top five exporters to the US, Cotton Comfort (that exported as much as $13.60 million worth of garment and won commercially important person award twice) shut down productions in 2008. Its investor has jumped to hydropower and housing business.
Momento Apparels has shifted its market to India. JD Apparels has closed down productions and its investors have moved back to India, Ami Apparels is also trying to survive by focusing on the Indian market, while Bishal Apparel´s promoter has jumped into media business. Other exporters too have divested into education and realty business.
Where are the workers?
No one knows what happened to workers laid off by the industry. A study conducted by UNDP Regional Center suggests a portion of skilled workforce moved to factories in India, while rest is working in local garment firms. Of the semi and unskilled workers, more than half have moved out to overseas jobs, and rest are either surviving as daily wage earners or earning livelihood by running road-side tea shops and mobile kiosks.
The study says workers left on the street today make much lower income and their families suffer from poor education and health conditions.
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