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This paper examines the slow growth of local supplies to
the garment industry in Sri Lanka. We have shown that the
overall investment environment in Sri Lanka and international
demand patterns constrain the formation of competitive local
producers of fabric and garment accessories. We have also
shown that building and maintaining sources of competitive
advantage among producers of garment inputs are crucial
to their development and viability in a highly integrated
global economic environment. From the Sri Lankan garment
industry experience and from the available evidence from
other countries, we have argued, in general, that the emphasis
on backward linkages as an important criterion in formulating
policies in an open economy for export-oriented industrialization
is somewhat misplaced. Changes in the global environment
and international demand patterns have made backward linkages
effects less powerful than they were for import-substitution
industrialization strategy in a closed economy. Although
local suppliers are useful and valuable, they cannot function
unless conditions exist which allow them to be competitive.
Table of Contents
- Introduction
- The Current Status of the Garment Industry
- Some Documented Factors Governing the Formation of
Backward Linkages: With Special reference to the Garment
Industry
- The Factors Constraining the Formation of Backward
Linkages
- Policy Implications and the International Experience
- Concluding remarks
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