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Global recession hits Lanka: Companies cut workforce

Tuesday, 17 March 2009 - 12:04 PM SL Time
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Global recession which had taken a stranglehold on the world economy has spread its tentacles in Sri Lanka too forcing 16 leading business ventures to lay off their entire workforce while 29 companies have retrenched part of the staff, Inter Company Employees Union said.

Among the companies which had laid off their entire work force are several garment factories and manufacturers of aluminium products and tiles. Companies located in remote areas such as Anuradhapura had also been forced to close down because of the global economic downturn

Some manufacturers of apparels, cement, cloth, plywood and bags have reduced their workforce while the others have warned of possible retrenchment after the Sinhala-Hindu New Year in April.

ICEU President Wasantha Samarasinghe, a former JVP parliamentarian told Daily Mirror the export volumes of some companies had dwindled by 80 per cent, and as a result were compelled to suspend their business operations.

Mr. Samarasinghe said his union identified the business ventures which stopped the overtime work of their employees or sent them home on compulsory leave following the financial crisis.

He said a leading cement manufacturer had curtailed its production by 40 per cent while the export earnings of a ceramic product manufacturing plant had come down by 30 per cent.

The International Labour Organization has predicted that more than 50 million workers will lose their jobs

worldwide due to the recession. In Sri Lanka, 50,000 private sector employees are expected to lose jobs this year. Sadly though, the government has not worked out any plan to ensure the welfare of those who may be pushed to the streets, he said.

Mr. Samarasinghe said that though a Compensation Formula was introduced, there was no fund to compensate those losing employment in the present circumstances.

We are proposing the establishment of a safety net for these people. If this down trend continues, the government will also lose its revenue in terms of taxes levied on exports and imports, he said.

UNP parliamentarian Kabir Hashim said the absence of a proper macro-economic policy had resulted in the present economic crisis effecting Sri Lanka.

Mr. Hashim said inflation had increased because of the government had printed money despite the warnings by opposition parties, and this had resulted in increasing interest rates leaving businessmen in the lurch.

Today, our garment manufacturers have to obtain loans at an interest rate of 12 or 13 per cent. However, it is only two or three percent in countries such as Vietnam and India. So, some of our leading manufacturers have started factories in those countries while closing down their plants here, Mr. Samarasinghe said.

However, Consumer Affairs Minister Bandula Gunawardane admitted that Sri Lanka had begun to feel the pinch of the global recession, and it was beyond the government s control.

In the United States, 2.6 million people have lost their employment. A similar situation prevails in countries such as Singapore, Britain and Dubai. We have not felt the crisis to that extent, he said.

Rubber exports contribute only 1.8 per cent to the economy. From tea, we get around 16 per cent. There is a notable impact on the garment industry. The Board of Investment has made arrangements to provide employment to those losing jobs in other industries. There will be no problem for skilled workers, he said.

Minister Gunawardena said the Labour Ministry had worked out a programme to train the unskilled workers so that they could be absorbed into areas where job security prevails.

When asked whether the government would be able to guarantee an income to all workers losing their jobs, the Minister said no government in the world could do it.


Source(s)
• Associated Press

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Vishnu
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LK Information  17 Mar 2009 10:40:57 GMT  Report for Abuse  
parliamentarian Kabir Hashim said the absence of a proper macro-economic policy had resulted in the present economic crisis effecting Sri Lanka.


Well done Akbir, bring him in, he will solve the Sri lankan crisis and from the bottom up the US's as well.

We are so unlucky here that we have neither a govt nor opposition who has macro economic policy to stop retrenchemts.
freedom1
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LK Information  17 Mar 2009 17:51:38 GMT  Report for Abuse  
In Sri Lanka, 50,000 private sector employees are expected to lose jobs this year. Sadly though, the government has not worked out any plan to ensure the welfare of those who may be pushed to the streets


An economically required tightening and restructuring of SL would make probably more than 500.000 redundant, but there ain't no option in a very competitive global market.

Southeast Asia and India are International factors with products and services that generate income to live on.

SL is 100% depending on charity, foreign workforce, China, Iran and donations.
kiora
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LK Information  17 Mar 2009 20:39:02 GMT  Report for Abuse  
Isn't Obama & Sarkozy was advice to follow Sri Lankan economic miracle by the ruling party minister recently and Sri Lankan pundits because Sri Lanka economy was steaming ahead unlike US,Europe,Australia,New Zealand to name a few.Must check with Daily News for accuracy of this new item.Why attack the ruling government for not having a plane for people who lose jobs as TBI mention any one loose there job because they will be snapped up by other companies who are struggling with shortage of skilled workers more to the point why plane there is no recession in Sri Lanka.
mari
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LK Information  17 Mar 2009 20:48:32 GMT  Report for Abuse  
And.... if and when the war ends, what about all those soldiers?
But I am 'glad' some of your politicians are waking up, better late than never, not that it will matter, even the western world hasn't got the faintest idea how to give this disaster a soft landing.
Gaja
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LK Information  17 Mar 2009 21:18:34 GMT  Report for Abuse  
We are so unlucky here that we have neither a govt nor opposition who has macro economic policy to stop retrenchemts.


MR wants his people to ignore the law and Due Process. Hence policies are a heavy burden for any government led by MR
p007
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LK Information  18 Mar 2009 04:50:29 GMT  Report for Abuse  
In Sri Lanka, 50,000 private sector employees are expected to lose jobs this year.


How many in the public sector will lose their jobs, if at all? Who ever may lose their jobs, NO ONE in the Jumbo Cabinet will lose the job or even any of the perks. Any bets?
Roshan2007
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LK Information  18 Mar 2009 14:23:11 GMT  Report for Abuse  
SL is 100% depending on charity, foreign workforce, China, Iran and donations.


If all these add upto 100% what about tea exports?
'Nikan boru kiyannathuwa hitapaban' -:)
freedom1
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LK Information  18 Mar 2009 14:35:50 GMT  Report for Abuse  
SL has a giant trade deficit, what means that exports don't cover the imports.

Tea is only very little worth so that a tea picker salary for one month of perhaps $40 is the result.

$40 are necessary to buy enough fuel for a van to drive some 200km.
kiwikanga
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LK Information  18 Mar 2009 21:47:45 GMT  Report for Abuse  
Freedom1

SL has a giant trade deficit, what means that exports don't cover the imports.


When hasn't it been so???? For donkeys years whether it was the UNP or PA, SLFP UPFA or whatever SL has been having giant trade deficits.

Large economies crash. Economies that are already down like in SL have no where to crash and fall! Anden bimata watunath peduren bimata watenney nehe!
dilrukpriyant
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LK Information  19 Mar 2009 04:53:54 GMT  Report for Abuse  
Think government should step in and take the issue with right spirit. Need to treat private sector equally as public sector. Can government evaluate the industries struggling due to global crisis and provide bail out package to survive next one and half years.
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