“Due to the pandemic, our sales in the local market fell drastically and the export trade has also been hampered. As a result, we are not able to pay our employees fully,” says SME entrepreneur Esrat Jahan Chowdhury, adding, “When I went to a bank branch to get loans, they wanted me to submit various papers including three years’ audit report of my business, which is not so easy to provide for small entrepreneurs like us. Getting SME loans should be made less complex.”
The readymade garment sector, as we all know is labour-intensive, and Bangladesh is no exception. The world’s second-largest apparel producer after China, the apparel industry in Bangladesh employs around 4 million workers, mostly women, in its around 4,000 factories, contributing almost 16 per cent of country’s GDP (according to the central bank).
However, the advent of technology lately seems to have put at stake the livelihood of a large chunk of the garment workers. The rise in use of labour-saving technologies in apparel factories is likely to take over around 10 lakh jobs in the country by 2025, the closing year of the eighth Five Year Plan (8FYP).
So, the Government must begin taking measures for job creation in other potential sectors such as jute, footwear and leather goods, agro-processing, plastics and light engineering, according to the draft 8th Plan.
While underlining that adopting necessary policy reforms for invigorating the process of export diversification is needed in such a scenario, the draft 8th Plan maintained women are far more likely than men to be retrenched from their jobs owing to the automation. Therefore, a more forceful skill-development policy directed towards women with adequate investment in technical, vocational and other training options is required.
Speaking at a virtual consultation meeting on the sector-based chapters of the 8th Plan recently, member of the General Economics Division of the Planning Commission, Dr Shamsul Alam said technology-based education will get importance in the Government’s new plan to make youths competent to survive in the competitive job market tackling challenges of automation.
Besides, SME and service sectors will also be prioritised as alternative sources of employment for a big number who will lose employment opportunities, pointed out Dr Shamsul Alam.
It may be mentioned here that as per an analysis by the International Labour Organisation (ILO) and the Government’s Access to Information (a2i) programme, 60 per cent or 27 lakh of garment workers in Bangladesh will lose jobs by 2041 and will be replaced by robots because of the automation brought about by the entrepreneurs.
Further, around 55 per cent or 14 lakh workers in the furniture sector and 40 per cent or 10 lakh in agro-processing will lose jobs under the impact of automation by that time. Moreover, automation will also erode 35 per cent or 4 lakh jobs in the leather industry and 20 per cent or 4 lakh in the tourism and hospitality sector.
“Our exports heavily depend on apparel products. Now, we have to go for product diversification and increase productivity through automation. This way, productivity will go up, but new employment opportunities will fall,” maintained Dr Shamsul Alam, adding, “So, it is essential to create job opportunities for newcomers in other potential sectors.”
Keeping new job creation at the forefront, the Government has prioritised further development of cottage, micro, small and medium enterprises in the 8FYP, he said, adding further that in the same way, the service sector also has a preference for taking its contribution to employment to 75 per cent from the existing 70 per cent.
The Government’s initiative to further develop cottage, micro, small and medium enterprises as alternate source of job creation is undoubtedly a very good move considering the fact that CMSME sector in the country, have had to bear severe fallouts of the pandemic amidst calls from economists and experts to give more emphasis on reviving the small and medium enterprises as it is struggling to recover at the expected pace, thanks to the pandemic.
“The Government must give more attention to the SME sector as the sector is lagging behind,” maintained Executive Director of Policy Research Institute of Bangladesh, Ahsan H Mansur, adding that stimulus packages for the sector did not work properly and that they should be assessed and reviewed.
Large companies and some SMEs have access to financing because of their strong connections with banks, but many SMEs do not have access that has become a problem for the SME sector, he said. Moreover, 9 per cent interest rate cap has also become an obstacle to loan disbursement to the SME sector considering higher risk of loans, Ahsan said, adding that there should be a review for the stimulus packages to get effective results.
SANEM Executive Director and Dhaka University Economics Professor Selim Raihan said that a survey finding showed that the SME sector was struggling to ensure access to finance from the Government stimulus packages and urged an assessment was urgently required on the stimulus packages implemented so far while Chittagong Stock Exchange Chairman Asif Ibrahim said that there was frustration about the stimulus packages announced for the SME sector.
“There should be more focus on SME recovery to accelerate the country’s economic recovery,” he said.
Meanwhile, as per reports, as of October, banks have disbursed just 42 per cent of the sum among the CMSMEs despite a repeated push from the central bank (Bangladesh Bank). To haul up the CMSMEs, the Government in April announced a Taka 20,000 crore bailout package. But seven months on, making sure the funds are in the hands of the parties that need them the most has turned out to be quite the challenge for all, underlined the experts.
Experts added the revival of the sector, which contributes about 25 per cent to Bangladesh’s gross domestic product, is imperative if the economy is to fire on all cylinders, as it was before the Coronavirus arrived on these shores in March and called upon the Government and the central bank (Bangladesh Bank) to top up the stimulus for the CMSME sector by lifting parts of the Indian Government’s recently-announced new emergency credit line.
“Due to the pandemic, our sales in the local market fell drastically and the export trade has also been hampered. As a result, we are not able to pay our employees fully,” underlined SME entrepreneur Esrat Jahan Chowdhury speaking to the media, adding, “When I went to a bank branch to get loans, they wanted me to submit various papers including three years’ audit report of my business, which is not so easy to provide for small entrepreneurs like us. Getting SME loans should be made less complex.”
The sector is not getting effectiveness and benefits of the stimulus packages, said an expert who added that the Government should revise the mode of the stimulus packages and also underlined that business cost should be reduced and made easy as businesses face hassles and additional cost in many aspects, which is proving counterproductive.
Considering the views and opinions shared by the experts on the current status of the CMSMEs and the various challenges it is faced with towards revival, how successful would be cottage, micro, small and medium enterprises in providing alternate source of employment to those who might be rendered jobless due to the automation, remains a much-debated subject still.
Bharat Tex Special Report 2026 
