Not a good time for the RMG sector

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Enough time we are surviving in is unprecedented. Covid-19 has shattered and disturbed nearly every sector like no other disaster in recent memory. Bangladesh in addition has not been overlooked in this regard. In that densely populated and impoverished country, Covid-19 is playing the role of a ticking-time bomb.

Bangladesh holds the crown for the world’s second largest garment exporter after China. About 83% of Bangladesh’s total export earnings result from the garment industry, which generates $32 billion each year. RMG and remittance will be the two largest contributors to Bangladesh’s GDP. Both of these sectors respectably contribute 11% and 8% to the GDP.

Ready-made garments have been playing an integral role going back few decades in Bangladesh’s GDP. Almost 80% of the country’s total manufacturing income originates from RMG sectors with the involvement of practically 4 million workers.

Bangladesh is heavily reliant on China due to the import of recycleables and necessary industrial ingredients. Every year, Bangladesh imports plenty of raw materials from China, which practically costs Tk14,000 crore. Due to the Covid-19 pandemic, China has turn off the export.

The impact has fallen after Bangladesh garments. That’s why the industries are compelled to be closed. Europe is definitely the biggest garment export market of Bangladesh, and bears almost 60% of the total consumption. Now, because of the prohibition of export to Europe and US markets, the factories cannot but close their affiliation with the garment workers.

In this instance, the factories cannot provide wages to the workers. That is adding an extra ache to our financial stagnation. And this monetary stagnation is putting a huge community in poverty. Up to now, Bangladesh’s RMG industries have witnessed nearly a lack of $1.51 billion which hobbles the livelihood of around 1.2 million personnel as said by the president of Bangladesh Garment Exporter and Manufacturers Association (BGMEA), Rubana Huq.

Due to the stoppage of export from Bangladeshi RMG products to Europe and US markets, the Bangladeshi factories are losing almost $100 a day. In regards to a quarter of most garment staff is below the poverty line, whereas $96 per month may be considered below the living wage.

According to BGMEA, about $1.5 billion in RMG exports have been stalled and the others has been cancelled. Due to this fact, the sustainability of RMG factories is looking extremely bleak. The survey discovered that when the order was cancelled, the supplier refused to pay buyers 12.1% for the recycleables like fabrics, machine, and so on that have been already purchased, and 91.3% buyers refused to pay production cost.

As a result, 58% of factories were on the road of shutting down. Due to the monetary fallout from the Covid-19 pandemic, around 1 million employees have been laid off, many of them were fired, some were furloughed. The foreign markets are unwilling to take orders. So, RMG factories are losing orders in quick succession. Thousands of jobs are in stake. The garment sector is fully reliant on the export-import circle.

Giant companies like H&M and Target declared that they would only pay for the merchandise which had recently been ordered before. But renowned companies like JCPenney, Kohl’s, Walmart have refused to pay for those.

They have cancelled such orders which already had reached their port or been shipped. The industries are in a dilemma, where using one side, the suppliers are making pressure to keep carefully the factories open, and on the other hand, trade unions and activists are emphasizing health issues first.

At this time, there are 4,560 active garment industries in Bangladesh according to BGMEA.

A survey conducted by Brac University and CandA Foundation observed that those factories that are not linked with BGMEA and BKMEA were sub-contracted in huge numbers, and kept operating at 50% of their capacity

A recent survey by the Global Workers Writers Centre discovered that order cancellations are experiencing a devastating influence on businesses and workers. The pandemic has caused a loss of around one million jobs in the sector, since overseas orders have plummeted consequently of reduced discretionary spending.

From the current situation, one can spot the following: If the pandemic continues for greater than a year, job losses and subsequent business shutdowns could have multiple severe effects on the economy.

Covid-19 is basically exacerbating the impact overall and creating a multi-dimensional crisis. To get back on the feet and minimize the entire loss, an effective and widespread plan by the federal government is required. The federal government should provide financial assist with save the dying RMG industries from collapse.

Paid leave must be distributed by the employers till the problem is in order. If the industries need to reopen, treatment and satisfactory health care must be ensured. Cash support to workers is necessary.

A tripartite monitoring task force consisting of the government., Ministry of Labour, and Trade Unions can enhance up the progress. Factory owners, brands, individual workers, right organizations, and trade unions should join hands and take effective measures necessary to escape this economic Instability. 
Source: https://www.dhakatribune.com

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