Big blow for the big industry

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For many, 2020 is a year of despair. The unprecedented effects of Covid-19 have jolted economies and offer chains world-wide with Bangladesh being no exception.

As a major participant in the garments sector, Bangladesh has been severely afflicted by the coronavirus fallout.

Primarily, the supply of recycleables to local garment factories was disrupted when China-Bangladesh's main source for such goods-halted almost all shipments somewhere between March and April as a result of coronavirus outbreak.

But despite all the gloom and doom, Bangladesh's apparel exporters expect brighter days ahead with the arrival of a Covid-19 vaccine that could preserve both lives and businesses.

They also look forward to fresh investments that could help increase their practically $750 billion contribution to the industry's global value chain.

During the March-April period, the garments sector faced order cancellations and delays worth about $3.18 billion.

The federal government had imposed a nationwide 'general holiday' between March 26 and May 30, when all monetary activities in the united states were shut down.

Nevertheless, garment factories were permitted to continue operations if indeed they had sufficient do the job orders from international buyers or if they wanted to make Personal Protective Equipment (PPE).

However the sector plunged into deeper troubles when numerous international buyers offered lower rates and deferred their obligations at the same time when restrictions on activity induced delays in shipment.

Due to this fact, many workers lost their careers as the factory owners were forced to shutter their units carrying out a drastic fall in production.

Besides, amid the threat of a second wave of Covid-19 infections, exporters received 30 per cent fewer work orders for next time of year (December to March) compared to the pre-pandemic levels.

What followed were heated protests in major industrial hubs such as Ashulia, Gazipur, Savar, Narayanganj and Chattogram, where terminated personnel took to the roads with a good demand to obtain jobs back.

At the same time, PPE development breathed new life in to the sector as the demand for such items has truly gone through the roofing amid this time around of crisis.

"It's been extremely problematic for us to battle the coronavirus fallouts seeing that the monetary uncertainty worldwide had a poor influence on us," said Rubana Huq, president of the Bangladesh Garment Makers and Exporters Association (BGMEA).

The BGMEA chief highlighted three important conditions that could prove crucial for the sector's future growth and sustainability.

First, the sector needs product diversification, like the production of man-made fibres.

Second, the workforce needs to be reskilled as a result that they can cope with the introduction of modern technology.

Third, Bangladesh has to be branded just as a shining case in point for the global garments sector, Huq said.

Around 300 small-and-medium garment factories were turn off in Dhaka and Narayanganj, influencing the careers of roughly 48,000 workers, according to BGMEA info.

Of the closed factories, not really a single you have reopened yet, stated BGMEA Director Md Rezwan Selim.

The Daily Star cannot independently verify the specific number of displaced staff but Selim, who's in charge of monitoring labour affairs, said nearly all these workers had been re-employed following return of job orders and capacity growth at certain factories.

The small and medium enterprises (SME) didn't get funds from the government's stimulus packages regularly as a result of stringent conditions located on the benefit and in addition because these were engaged in subcontracting, according to Selim.

Around 1,200 SMEs are in big trouble because they either lack the work orders or financial strength to deal with the low price pressure from buyers because of the lack of cash from the stimulus plans.

The Covid-19 fallout as well forced the garment sector to look at new policies for the first time in its four-10 years history.

For example, factory owners disbursed about Tk 3,000 crore with their workers on a monthly basis through various mobile personal offerings (MFS) in a bid to keep up social distancing.

"Ensuring the workers were paid through MFS was a crucial achievement since registering as a result many people with the system within such a brief time period was truly remarkable," explained MA Razzaque, chairman of Exploration and Policy Integration for Development (Fast).

Although the stimulus package for wage support in the export industry was an effective policy response, perhaps considerably more proactive support measures could possibly be considered for the informal sector workers and other vulnerable groups, he added.

If the world economy recovers fast in 2021, then Bangladesh's garment sector would reap the benefits of it as well.

"I would also like the Biden administration to soft over our existing trade disputes while the Universe Trade Organisation could renew its commitment for multilateralism," stated Razzaque, also the study director of the Insurance policy Research Institute (PRI).

2021 is a significant year for Bangladesh as it will celebrate its 50th year of independence and be eligible for graduation from a least developed region (LDC).

Razzaque went on to state that 2021 should be a season where promoting the country's export competitiveness will be a top priority.

"A apparent LDC graduation action approach ought to be formulated alongside a much bigger press for export diversification in 2021," he said.

Meanwhile, the global outlook will depend on how quickly developed countries found in the west manage to vaccinate their population.

"I also anticipation foreign direct investment will also grab," Razzaque added.

On the export front, Bangladesh's garment shipments fell to $0.37 billion in April, the cheapest monthly total in the country's history since 1978, when the first consignment of formal woven shorts were shipped.

However, exports began recovering following arrival of a stimulus package totalling Tk 10,500 crore for paying the wages and allowances of garment sector staff.

In line with the Transparency International Bangladesh, the textile and garment sectors have obtained about Tk 62,887 crore as stimulus money from the government and private organisations.

In the January-November window of 2020, Bangladesh's total garment exports stood at $24.83 billion, a 17.64 % year-on-year fall from $30.15 billion, relating to data from the Export Promotion Bureau (EPB).

Even so, shipments of knitwear things are increasing carrying out a change in the global manner sense amid Covid-19, when most people prefer comfy dresses to stay at home with.

Of the total revenue from garment shipments in July to November, $7.13 billion originated from knitwear items, which registered 4.8 % year-on-year growth.

Meanwhile, woven items fetched $5.75 billion, a decline of 8.29 %, according to EPB info.

Kutubuddin Ahmed, chairman of Envoy Group, said he does not have any plan to expand his business next year as he is now trying to create his business even more sustainable by recycling yarn and various other wasted clothing items.

"We imagined that the business enterprise would return to normalcy by December but the second wave were only available in the UK and all organization with the united states got subsequently halted. We might be optimistic however the the truth is different."

Source: https://www.thedailystar.net

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