Knitwear manufacturers in Bangladesh have sought policy support from the Government to address the losses incurred during the quota reform movement-led violence. They also requested loans at a 2 per cent interest rate for a year, claiming that they cannot get through this crisis without help from the Government.
According to Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) executive president Muhammad Hatem, the industry has been severely impacted by the violence during the past two weeks.
Additionally, he stated that they must pay the employees next week and that a vested interest group would profit from late payment. To deal with the financial crisis, they primarily looked to banks for loans, which was not a motivating factor.
Industry insiders said that around Taka 5,000 to Taka 6,000 will be required for one month’s wages of the workers in the garment industry along with electricity and gas bills.
Manufacturers typically don’t get paid until international shipments arrive and the paperwork is received by the bank. However, the shipment against the buyer’s requests was not feasible because of the quota reform movement.
Additionally, a lot of cargo needs to be carried by air, which raises the cost, according to industry sources.
Additionally, Mohammad Hatem insisted that the central bank halt the ongoing industry loans’ installment payments for the following six months, or until January 2025.
About the port, he stated that circumstances during the previous two weeks prevented the port authorities from releasing the containers that were arriving at Chittagong and other ports on schedule. This led to container congestion, which might take a month or a month and a half to alleviate.
However, the port authorities levied port demurrage charges to clear the containers. He urged the authority not to levy port charges from 15th July to 30th August to protect the businesses.
He also said that the members of the BGMEA will get a demurrage waiver as compensation for their economic losses due to the recent unrest. He demanded the same facilities for the BKMEA members also.
In the meantime, on 28th July, BKMEA wrote to Finance Minister Abul Hasan Mahmood Ali requesting four recommendations. These included low-interest loans, policy support, a one-month waiver of container discharge delay fees owing to port congestion, and requests for a prompt and complete rollout of internet services.
Due to the escalating tension stemming from the quota reform campaign, a curfew was enforced starting at midnight on 19th July. Subsequently, the Government issued a public holiday, and the country’s factories began operating from 24th July to port activities when the curfew was lifted after four days.
According to BGMEA, Taka 11,500 crore was lost by this industry during the days of closure. Industry insiders also claim that the washing and backward linkage sectors have lost Taka 3,000 crore.
