Companies exporting within the QIZ framework had the new-found opportunity to export at zero tariffs to the US at a time when custom duties on garments and readymade apparel entering the US ranged between 16 and 36 per cent. And to begin with, there was a boom. Exports doubled from almost $300 million in 2005 to around $600 million in 2006, but then they levelled off in 2008, reaching $700 million. Today, four years later, Egypt’s garments exports have managed to capture only one per cent of the US market. In fact, on the list of exporters to the US Egypt came 22nd…These figures were revealed by Lynn Salinger, garment industry workforce specialist and consultant for the USAID-funded Technical Assistance for Policy Reform project (TAPRII), at a panel discussion titled “Improving labour productivity in Egypt’s ready- made garments sector”. ..
“These were not the only striking pieces of information presented at the panel discussion, organised by the American Chamber of Commerce in Cairo (AmCha.. Ali Awni, director of the QIZ Unit, the Ministry of Trade and Industry has pointed out that even within those exports, garment manufacturers are mostly providing low-skill products such as denim jeans. He said that providing for Kmart or Wal-Mart is not what Egyptian exporters should be doing, but that they should be targeting high-end products such as shirts or intimate apparel. But he said that such products needed higher skill levels, which are currently lacking in the market force. …
“Garments manufacturer Cairo Cotton Centre CEO Magdi Tolba also lamented that Egyptian QIZ companies have been unable to achieve their potential, pointing out that Jordan’s exports have grown in the six years since it signed the QIZ from $30 million to $1.25 billion today. He said that it is a pity that of Macy’s, the US chain store, $20 billion worth of annual garments purchases, Egypt only provides $25 million worth of goods. To him, this is because of poor performance and low labour productivity. …
“Tolba went on to say that productivity per minute among Egyptian workers is almost 50 per cent lower than among top exporters like Bangladesh. It takes an Egyptian seven minutes to make a polo shirt whereas a Bangladeshi would take only four minutes. He further complained that Egyptian producers suffer an eight to 15 per cent turnover per month, and 12 per cent absenteeism per day. …
“But it is not only the workers who are to blame. Claude Loiselle, International Labour Organisation senior specialist on occupational safety, health and working conditions, argued that working conditions are often not conducive to work, causing faulty production and delays in output….
“Training is another element that is lacking. And according to Awni, it is not only the machine operators who need the training but management staff as well. In fact as Salinger pointed out, “Training of middle management and supervisors to introduce better planning and controls can increase productivity by 20 per cent or more in most factories.”…
Date:4/14/2009
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