After a long wait, State Minister for Labour and Employment Monnujan Sufian inaugurated EU’s cash support programme for retrenched workers. Beneficiaries will receive the funds directly through mobile financial services (MFS) or their bank accounts and any worker, including lactating mothers, who were employed in any active member factory of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB) and Bangladesh Finished Leather, Leathergoods and Footwear Manufacturers and Exporters Association (BFLLFEA) up until February are eligible for the grant.
The Government might even extend this service beyond its time limit for social safety net purposes if it is noticed that the workers could not return to their jobs and on the basis of the availability of funds from the Government exchequer and donor agencies, keeping in mind which, the Government also called for increased donations from donor agencies.
Some 4.1 million workers, mostly women, work in Bangladesh apparel industry, to produce garment items for global brands and retailers. However, the Coronavirus pandemic, have had a devastating impact on their lives.
As the virus spread, many top retail brands cancelled orders that were already in production. Many even asked for discounts or sought extended payment terms, to stretch the already beleaguered garment makers, to the limits. As per estimation of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the pandemic had an immediate impact on 1,150 factories that reported US $ 3.18 billion worth of order cancellations even as export in 2020 decreased by 16.94 per cent to US $ 27.47 billion from that of US $ 33.07 billion in 2019.
According to EPB data, out of the US $ 27.47 billion earnings from RMG in 2020, US $ 11.92 billion came in the January-June period and US $ 15.54 billion in the July-December period.
If that was not all, prices of the top 20 apparel items reportedly declined in 2020 due to a fall in global demand. The items comprising 12 major knitted and eight woven items contributed more than 80 per cent of the total RMG export earnings last year.
According to the BGMEA, average prices of the knitted items in 2020 declined by 3.47 per cent compared to that in 2019, which include cotton-knitted T-shirts, both cotton and man-made fibre-knitted jersey and pullover, cotton-knitted trousers, cotton-knitted shirts and trousers, babies’ cotton-knitted garments even as BGMEA President Dr Rubana Huq said exports of those items have gone down by 9.02 per cent in dollar value and 5.75 per cent by volume (in kilogramme).
This results in a unit value (price) decline by 3.47 per cent on average, she explained while on the other hand, average prices of top eight woven items fell by 1.0 per cent the same year than the previous year’s rate.
Such an unprecedented situation had a very adverse bearing on the industry with many garment makers bowing out of business for good. The result – factory closure and large-scale workers retrenchment.
Even though the Government initiated steps to combat the economic fallouts of the COVID-19 pandemic, but as per Transparency International Bangladesh (TIB), which released findings of its report earlier titled ‘RMG Sector in COVID-19 Crisis: Governance Challenges and Way Forward’, around 42 per cent apparel workers in Bangladesh, were deprived of the Government incentives to combat COVID-19’s economic fallouts.
Though the estimated salary and allowance of readymade garment workers in the period April-July was around Taka 12,692 crore, the incentive amount in the Government package was Taka 9,188 crore, 27.6 per cent less than the requirement, it said while adding that most incentives were given to the factory owners to deal with the business crisis.
Eighty-four per cent of the incentives was paid to address business interests of the owners, TIB found while there are also allegations that 21,000 workers in 64 factories, which took incentives, did not receive their salaries and allowances due to announcement of factory layoffs and dismissed workers, the report said.
The TIB report also mentioned no guidelines for sub-contract factories, which creates uncertainty about the salaries and allowances of about 1.5 million workers of 3,000 factories even as the large factories got priority in receiving incentive funds.
In such a scenario, the EU’s cash support programme, came as a blessing for the retrenched workers.
Monnujan Sufian said the Government took the initiative to launch the social security programme as part of a concerted effort by the Honourable Prime Minister to provide emergency humanitarian assistance to destitute workers in the Readymade Garments (RMG), Leather Goods and Footwear Industries in response to the global epidemic. She also went on to say that the total number of beneficiaries will increase in time.
As per the initiative, the workers who lost their jobs due to the Coronavirus fallout across three sectors, namely garments, leather and footwear, would finally receive Taka 3,000 per month as financial assistance. In the first phase, 1,794 people will get cash assistance of Taka 3,000 each month for a three-month period starting from September.
Considering the workers’ livelihoods, the EU, the largest export destination for Bangladeshi goods, announced € 113 million grant to pay three months of wages to one million workers laid off in export-oriented industries amid the pandemic. However, there have been delays in implementing the same as the EU offered grant to fight the Coronavirus pandemic related crisis over the non-payment of retrenched workers while the Government wanted to instead create a welfare fund with the grant as it reportedly felt there could be issues if the terminated workers were compensated with partial wages while on the other hand there was also apprehensions that factory owners will feel encouraged to go for more retrenchment once the money distribution begins.
Then there were issues related to beneficiary list as well. So, even as a list was prepared with help from the sectors’ trade bodies, Sufian urged the workers to enlist their names through digital means in their respective factories for becoming eligible for the cash support.
According to the concerned Ministry, it submitted a list of 7,390 workers, of which 1,894 have been finalised, while selections are going on among the rest. “But in the meantime, the financial aid meant for workers that have been made redundant by the current situation will continue to remain idle,” Sufian said even as the Government aims to disburse Taka 3,000 per month for a three-month period to about 10 lakh workers over the next two fiscal years, according to a circular from the Labour and Employment Ministry.
The State Minister went on to say that the total number of beneficiaries will increase in time even as she expressed hopes that more international organisations would come forward and cooperate with the Government to provide support for workers in all sectors.
It may be mentioned here that many workers lost their jobs due to the two-month nationwide shutdown between 26 March and 30 May, 2020 while others were laid-off for lack of work orders from international retailers and brands.
So, given the EU initiative, retrenched garment workers can now think of at least trying to effectively deal with the livelihood challenges, which was otherwise not possible in want of any financial aid.