NYT: Dollar's Fall Silences Africa's Garment Factories

[RamboLiberal]

http://www.nytimes.com/2005/03/12/business/worldbusiness/12africa.html?ei=5094&en=7bbc3c9005f0f803&hp=&ex=1110690000&partner=homepage&pagewanted=print&position=

MAPUTSOE, Lesotho - Buy a T-shirt at Wal-Mart, fleece sweats at J. C. Penney or Hanes panties anywhere in the United States, and there's a halfway decent chance that they were stitched together here, in an acre-size garment factory crammed with thousands of frantically clacking sewing machines. Virtually its entire output, 25,000 items of clothing daily, is America-bound.

These days, that is a disaster. "Two thousand people work here, and unfortunately last week I had to retrench 500 people, because there are no orders," Boodia Heman, director of the Ever Unison Garments factory, said in a recent interview. "The American buyer is not coming to Lesotho to buy."

Actually, the problem is not so much the buyers from America. It is the American dollar, and its headlong plunge in value. Three years ago, Lesotho's garment factories had to sell only $56 worth of clothes to stores in the United States to cover the monthly wage of 650 maloti for a sewing-machine operator. Today, that same salary consumes $109 in sales.

When the dollar is worth 8.5 maloti or more, Mr. Heman said, "we break even and we are satisfied." Right now, the weak dollar fetches less than 6 maloti.

[The Doctor.]

1. You know that feeling that you get

when the roller coaster crests the arc and you feel that sudden stillness before the harrowing plummet?

[DELUSIONAL]

3. yep -- which is why I don't like roller coasters

Slave wages.

[Name removed]

2. Deleted message

Message removed by moderator. Click here to review the message board rules.

[The Doctor.]

6. And we know that...

So what the heck is going on?

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=1301347&mesg_id=1301403

[FloridaPat]

8. Cheap war for them.And not a shot fired.

[NewJeffCT]

11. the problem is the Chinese yuan is tied to the dollar

So, while our dollar is losing buying power, we're also making Chinese goods cheaper for the rest of the world, too!!

[leesa]

12. They won't use nukes. No need to fire a single shot.

[femmecahors]

4. I thought my husband was joking when he said . . .

the U.S. Dollar has become a Third World Currency!

[fortyfeetunder]

5. which is sad, they make beautiful fabric

African made fabric is some of the prettiest I've seen. It is a now a rare commodity.

[RUMMYisFROSTED]

7. Great news!

Lesotho is hiring!

[DeepModem Mom]

9. kick

[MrPrax]

10. So Something Else That's Wrong...

and the Third World suffers...

I figure it has less to do with the US dollar as it does with the usual globalist nostrums of 'freedom though freer trade' and the ending of the ATC


A Stitch in Time? The Ending of Textile Quotas

"Anxiety over the January 1 2005 deadline for phase-out of the textile quotas is strongest among producers who have benefited from the quota system (for example, Bangladesh and Mauritius) and now fear that the end of the quotas will allow major producers, such as China and India, to clutch their previously protected markets in the US and the EU.

In fact, the WTO Director General, Supachai Pantichpakdi, recently held informal discussions with some Members following a request from Mauritius' Minister for Foreign Affairs, International Trade and Regional Cooperation, J.K. Cuttaree. Cuttaree asked for an emergency meeting of the WTO Council for Trade in Goods (CTG) to examine the adjustment costs related to the quota abolition. Other than Mauritius, the Ministers of Bangladesh and Nepal have also sent letters to Supachai with similar requests.

Mauritius' share of T&C in its total merchandise exports is of 54 per cent, whereas those of Bangladesh and Nepal are 76 per cent and 43 per cent respectively. Less developed countries like Bangladesh do stand to lose out as far as their garment industry is concerned, as they will find it difficult to compete."
http://www.aiada.org/article.asp?id=25865

....
or from

Summary of studies and reports on the impact of textiles quota elimination

http://www.sweatshopwatch.org/global/euconf.html

Least Developed Countries (LDCs)

A number of studies point out that, whilst a rapid end to the MFA would have been more favourable to some developing country exporters, the agreed slower phase-out may have actually protected the position of the smaller producers and some LDCs.

Most of the studies agree that once quotas are removed, some LDCs are expected to suffer from their lack of textile industry and poorly developed infrastructure. The poorest countries have little choice but to compete head on with the biggest low-wage suppliers by offering lower prices, by contrast to developed countries and NIC which have moved offshore or have shifted to other products of higher value added.

Other studies – e.g. a study done recently by the UNCTAD<5> – find that duty- and quota-free market access will benefit LDCs. The sources of the benefits to LDCs are both improved terms of trade (associated with higher export prices in donor countries’ markets) and improved allocation efficiency. Moreover, they found that coordinated action from the Quad would stimulate LDC exports in a broader range of sectors (and especially in clothing products) and would spread substantial gains across a higher number of LDCs."
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I guess Lesotho is one many LDC that are toast