Huge job losses feared in garment industry

The Swazi government estimates that a third of all garment industry jobs will be lost by mid-year due to the crisis facing textile firms. "The textile industry created 45,000 jobs in 2001 and 2003. Fifteen thousand jobs will be lost from last year to June this year [2005]," Enterprise and Employment Minister Lutfo Dlamini told a meeting of the Swaziland Textile Exporters Association last week. Robert Maxwell of the textile exporters association said none of the 10 major textile companies in the country, which are largely Taiwanese-owned, had received orders for the second quarter of 2005. Some factories closed for the holidays at the end of 2004 and have yet to reopen. Swaziland's clothing industry took off in 2000, when Asian investors opened factories to take advantage of the US trade benefits from the African Growth and Opportunities Act (AGOA). AGOA permits Swazi exports to enter the American market without paying import taxes. However, that price advantage has been cancelled out by a 50 percent rise in the value of the South African rand against the US dollar. The Swazi currency, the lilangeni, is linked to the rand, making Swazi exports costlier to American buyers. Compounding these problems, the World Trade Organisation's Agreement on Textiles and Clothing ended US quotas from 1 January 2005, meaning that textile giants like China now have freer access to the US market. Asian companies had set up shop in Swaziland to use AGOA to sidestep quota restrictions. "The Chinese have the price advantage because of low wages - a Chinese worker gets about R427 (US $71) a month; a Swazi worker earns twice as much: R915," Maxwell explained. Swazi labour unions complain that garment workers can scarcely scrape by on their salaries, while being subjected to unhealthy working conditions. Cultural misunderstandings have also led to shop-floor conflict. "The [Taiwanese] live above the factory in a hostel on the second floor - they want nothing to do with Swazis," said Thuli Gule, a seamstress at a factory in Matsapha outside Manzini, the country's commercial capital. Last month Taiwanese managers at one factory were attacked by 450 workers striking for better salaries and working conditions. All strikers were fired. Gule said complaints about unfriendly Taiwanese managers among her co-workers have diminished in light of recent worries that the factories will shut down. "I have heard that a half a loaf is better than none. I don't know if that's a Chinese expression, but it's true," Gule said.