For Bangladesh’s garment workers, it doesn’t pay to dress up the world anymore

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Rozina Begum is worried that she and her husband and two children will starve. On March 25, a manager of Ultimate Fashions Ltd. in the Ashulia garment district on the outskirts of Bangladesh’s capital Dhaka, summoned her plus some 300 other personnel at the plant and told them to complete what they were focusing on and go home.

“I asked the manager, ‘why are you doing this to us?’ We were told there will be no production from tomorrow. The person didn’t say other things,” Rozina said by phone, confined to her tiny home. “I can’t go out buying a new job. I just have to await the shutdown to get rid of.” Even then, she doesn’t know if she will get her job back.

Rozina is among millions of people who are on the cheapest rung of a global supply chain that has been shattered by the coronavirus. In an industry that connects a number of the wealthiest and poorest persons on the planet, from the blissful luxury brand stores in NY and Paris down through the wholesalers, shippers, cotton growers, textile makers and garment manufacturers, they are among those most damaged by the pandemic-induced global slump.

The fallout has been especially damaging in countries with some of the world’s poorest workers, from Pakistan to Cambodia, Indonesia and Vietnam. Many had benefited from the migration of low-cost jobs from China as wages in the world’s second-biggest economy rose and factories moved to higher-value production. Now, some in the industry fear that part of that work may move back again to China, where factories already are restarting and shops are starting to reopen.

“There’s no good story for us,” Rubana Huq, president of Bangladesh Garment Manufacturers and Exporters Association, said in an interview. “China will wrap up being both supplier and the buyer. Brands are now embracing their shops that are reopening in China.”

Huq said she’s concerned retailers in Europe and America, the two key markets for Bangladesh, will switch to suppliers in China and sell to Chinese customers as that country restarts business. U.S. retail sales fell by an archive 8.7% in March from the previous month, led by a 50.5% plunge at clothing stores and a 26.8% decline at furniture and home furnishing stores. And forecasts advise that figures for April will be worse.

Even in China, the world’s top textile exporter, the problem isn’t much better yet. While more textile mills are resuming operations, the quantity of overseas orders being canceled continues to be increasing, according to a survey by China National Textile and Apparel Council. A survey of 166 textile mills in the first week of April showed that 70% of reported overseas orders are in less than half of their normal level.

In Vietnam, where around 78% of the country’s textile and garment employees experienced their jobs suspended or hours cut as a result of pandemic, some companies have switched to making fabric face masks for export. However, industry group Vinatex says that the nation’s textile sector could lose $465 million if the crisis continues into May.

The crisis boiled over in Pakistan’s commercial hub of Karachi in April, when dozens of workers protested before a factory gate for a denim maker. Tariq Khaskheli, a political activist who led the protest, said police baton-charged the protesters.

“Our only demand is that the staff get their jobs back,” he said. “How would they feed their children? The federal government has issued clear instructions that no staff should be let go during the lockdown however they fired hundreds.”

Among those dismissed was 21-year-old student Waleed Ahmed Farooqui, who relied on the wages to pay his university charges and support his family of seven because his father, a driver, no longer has enough work. “What else can we do? If this lockdown continues and I can’t get another job, I'll have to go out and beg on the streets,” he said.

Nowhere in Asia is more reliant on the garment trade than Bangladesh, where the industry has driven economic growth in the past decade. More than 80% of the country’s export earnings via ready-made garments and the majority of personnel in the factories are women, based on the Bangladesh Garment Manufacturers and Exporters Association, which represents companies that employ 4 million workers.

The country has a lot more than 7,000 garment factories together with a huge selection of spinning, weaving and dyeing mills, the U.S. Department of Agriculture said in a written report last year.

A lot more than 1,100 of these factories reported canceled orders worth $3.17 billion in export sales by April 20, affecting 2.27 million workers, said Huq. Virtually all the “brands” and retailers had declared force majeure, canceling orders outright despite having fabric on the cutting table, she said. The cancellations sent shockwaves through the banking industry, and today textile companies can’t get credit.

“We are literally pleading with all brands to create some arrange for a relief,” that could involve spending money on in-progress projects and other orders, Huq said, who made a plea in a video posted on the site of the International Cotton Advisory Committee in Washington.

On April 8, the STAR network, an umbrella group representing garment makers from Bangladesh, Cambodia, Myanmar, Pakistan and Vietnam, published a joint statement contacting global brands, retailers and traders to honor the conditions of their contracts rather than to renegotiate payments or cancel orders, but to aid the millions of employees and their own families who provide you with the market.

“It is time for global businesses to uphold and honor their commitment to labor rights, social responsibility and sustainable supply chains,” the group said.

Rozina, the jobless worker in Dhaka, said she was paid 8,000 taka ($94) in wage on her behalf work in March but was deprived of 17 hours overtime pay. Her husband, a rickshaw driver who was simply sitting next to her during the phone interview, said he waits for hours in the pub for passengers that never come. With the administrative centre under lockdown since March 26, the roads are almost empty. Rozina said the tiny she had saved is fast depleting plus they are running out of food. The family cannot even go back to their village as a result of the lockdown.

Rajesh Sethi, managing director of Ultimate Fashions, said, “It’s not only us who are facing” this crisis. Everybody is going through the same thing.” He declined to speak on job losses and worker payments. His company has already established $2.37 million worth of orders suspended or canceled because the disease outbreak, in line with the garment exporters’ association.

Central banks like the U.S. Federal Reserve are taking unprecedented steps to halt worsening financial conditions and contracting credit, but that’s more challenging in emerging markets, where authorities have fewer options and frequently have to count on foreign aid in an emergency.

The pain includes the garment industry’s suppliers, the cotton growers, ginners, spinners and weavers supplying the raw materials for T-shirts, jeans and dresses.

“There is absolutely no trade happening in the neighborhood cotton market. The majority of the textile mills and ginning factories are closed,” said Naseem Usman, chairman of the Karachi Cotton Brokers Forum. “The interest on the loans is ballooning while they can’t operate. Who will buy cotton when the textile millers themselves are shut?”

Cotton prices tumbled 23% this season in NY, touching the cheapest level since 2009 earlier this month. Growing stockpiles mean the pain for growers from India to China and the U.S. could extend well beyond the recovery from the virus. The U.S. Department of Agriculture estimates global inventories will rise to 91.2 million bales, the most since 2014 and the same as 82% of gross annual demand.

“Global manufacturing capacity may require several years to rebuild,” said Jon Devine, an economist with Cary, North Carolina-based researcher Cotton Inc.

In South Korea, Seoul-based textile manufacturer Shinsung J&T Co., which has a factory in China, is facing “complete disaster,” said Olive Lee, financial manager at Shinsung, which supplies companies including U.S. brands. “Buyers in the U.S. are either holding or canceling orders and we aren't getting paid for the orders that contain been completed. The big fear is that people don’t know when this will end.”

Lee said Korean government measures to support small and medium companies are too little and loans being provided by banks don’t help, asking instead for tax cuts or support for income payments. “Cutting our employees’ income is the last resort but that is something that we may want to do,” she said.

For many who toiled in the factories that turn the fabric into clothes, there’s no help at all.

“It is going to put the personnel in abject poverty,” Huq said. - Bloomberg
Source: https://theprint.in

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