After a long time, ever since the breakout of the COVID-19 pandemic, the readymade garment manufacturing sector of Bangladesh seems to be regaining some lost ground! If latest reports are something to go by, buyers are now coming back with work orders, and some factories are even running at almost 80 per cent of their capacities, with many amongst the big names reportedly doing decent business.
As the pandemic started to loosen its stranglehold in many parts of the globe, industries have started re-reopening and countries have started to mobilise trade and commerce strongly, once again. Even, the situations in Bangladesh’s major export markets, Europe and the USA, have also started improving, consequent to which things are looking up in the export front.
According to the National Board of Revenue (NBR), despite a steady decline in exports in June as compared to the previous year, the negative growth rate was lower than before, at 11.43 per cent, which was 85.25 per cent in April. Further, in the first 18 days of July, apparel exports stood at US $ 1.57 billion and this is largely due to global buyers reinstating work orders in a big way, claimed industry people, who underlined that although the export earnings were still lower than the amount earned in the same period of last year, the shipment of RMG products worth US $ 1.57 billion in 18 days was a positive sign for the country.
“The export trend in July is encouraging, as exporters are feeling the pressure for additional shipments this month due to the upcoming Eid-ul-Azha vacation,” maintained Ahsan H Mansur, Executive Director, Policy Research Institute of Bangladesh, adding, “We should be happy if we could run our RMG factories with 70-80 per cent capacity up to September.”
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Meanwhile, First Vice President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Mohammad Hatem, on his part, reportedly maintained that the global buyers had started reinstating their cancelled or on-hold orders as the severity of the coronavirus pandemic decreased in the European Union and some other export destinations. He said that the global buyers revived 70-80 per cent of orders which were cancelled or put on hold due to the outbreak.
“We are happy, as buyers started reviving most of their cancelled orders, and now we are running our factories with 70-80 per cent capacity,” Mahmud Hasan Khan Babu, Managing Director, Rising Group, underlined while interacting with the media, adding that it is a positive sign that shipments in the 18 days of July stood at US $ 1.57 billion, while Dr. Khandaker Golam Moazzem, Research Director of the Center for Policy Dialogue (CPD), said that Bangladesh was slowly moving towards a better position in terms of exports. He said that the export figures from June indicate such progress, further adding that Bangladeshi RMG exporters are also likely to get a higher volume of export orders ahead of Christmas, which is a key shopping season in the West.
However, despite these visible signs of improvement, there’s apparently nothing much to rejoice on the employment front. According to data of the country’s Industrial Police, 29,369 workers, mostly from the readymade garment sector, have lost their jobs in the past 2 months, as owners have largely adopted cost-cutting measures citing lack of work orders due to the COVID-19 pandemic. The data, which is based on 165 industrial units under six industrial zones, shows that out of the total 29,369 retrenched workers, 21,557 are from factories listed with three garment and textile trade bodies — 18,916 are from 104 factories listed with the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), 2,377 from 20 factories under the BKMEA and 264 from five mills under the Bangladesh Textile Mills Association (BTMA). Besides, 5,719 workers have been terminated from 18 factories under the Bangladesh Export Processing Zones Authority (BEPZA) and 2,093 workers from 18 non-RMG units. The number of retrenched workers, labour rights organisations say, is at least three to five times higher than the figure shown in the Industrial Police data, as there are many factories out of the jurisdiction of the Industrial Police and that many workers have been forced to leave jobs on their own.
Even though the Government warned as early as mid-April that factories would not receive facilities from the financial package of Taka 5,000 crore that the Government announced in the last week of March mostly for the payment of workers’ wages if they go for layoffs, many factories have allegedly continued mass layoffs, so much so that according to different estimates, over one lakh workers from the capital and other industrial areas have taken recourse to reverse migration and have ended up in rural areas, wherefrom they migrated earlier following economic, environmental and climate-related challenges.
It may be mentioned here that earlier in March, Prime Minister Sheikh Hasina announced Taka 5,000-crore coronavirus bailout package to help pay the workers’ wages (for April, May and June), but eventually the total amount disbursed in this direction stood at Taka 7,500 crore. Meanwhile, Salman F Rahman, a private industry and investment affairs adviser to the Prime Minister, has hinted that the Government was mulling to make available further allocation for the apparel sector to pay wages to workers from the stimulus package of Taka 30,000 crore, announced to enhance the working capital of the industry.
Under the given circumstances, workers’ lay-off is not justified, felt many.
“Though more than 25,000 workers have been fired so far, we have been suggesting the factory owners to not sack them,” said Shibnath Roy, Inspector General, Department of Inspection for Factories and Establishment (DIFE), while Amirul Haque Amin, President, National Garment Workers Federation (NGWF), maintained, “Firing workers at this critical time is inhumane. This is the time when the owners should stand beside the workers. Rather, they are firing workers.”
The Labour Ministry and the DIFE have already held several meetings with the representatives of garment factories and other stakeholders to discuss the issues of jobs and inflow of work orders. “In every meeting, we asked the factory owners to not sack workers. But the firing in the garment sector has continued,” Shibnath Roy stated.
Meanwhile, Arshad Jamal Dipu, Vice President, BGMEA, reportedly said during a media interaction, “We are urging the owners not to fire workers. We are telling them to wait for at least 2 months, as the inflow of work orders is increasing.”
As per the DIFE Inspector General, many factories that employ 200 to 400 workers are in deep trouble, as they do not have enough work orders and even when work orders are returning, these factories are not being able to run at their full capacity. And consequent to their weak financial status, many such factories are allegedly shutting down, thereby rendering thousands of workers jobless. “The small units are struggling to survive because of the lack of work orders. If 10 per cent of their workers lose jobs in this difficult time, it would not be surprising,” Arshad reportedly claimed, adding that the tally of the fired workers will not be too high as no factory wants to lose skilled workers.
Experts, however, have expressed apprehensions that the mass layoffs and reverse migration, if not addressed immediately, will usher in a crisis and might lead to social instability. They even recommended that the Government should consider an employment guarantee scheme for the next 6 months for people who became jobless due to the COVID-19 fallout.
At a virtual programme, they emphasised the preparation of an authentic and actionable database on the country’s labour market linked with job matching and job placement. The South Asian Network on Economic Modeling (SANEM) arranged the webinar titled ‘COVID-19 and the challenges of labour market in Bangladesh’. SANEM projected that in a moderate scenario, six million employed people might have lost jobs since April, and in the worst scenario, the number of jobless people would reach up to 12.47 million.
Echoing the SANEM findings, General Economics Division Member (Senior Secretary) Shamsul Alam said that the rate of employment had been falling even before the COVID-19 outbreak, but has worsened ever since then. He emphasised on monitoring and evaluation of the stimulus package for economic recovery.
Further, SANEM Executive Director Selim Raihan said that the Government should form a labour and employment commission to assess the current unprecedented situation and recommend necessary measures accordingly, while the Bangladesh Bureau of Statistics should be entrusted with collection of data on the situation. “The Government should consider employment guarantee schemes for the 6 six months for vulnerable people and introduce new social safety net programmes targeting the labour market, as jobless people are not included in most of the SSN programmes.”
So, until things turn for the better, workers seem to have no option but to face the adversities for now.