The recent unrest surrounding the quota reform movement has inflicted significant losses on Bangladesh's garment sector. The resumption of internet services has made the extent of the damage more apparent, revealing that business owners faced multiple layers of setbacks during the outage.
With internet services restored, many buyers have either cancelled their orders or demanded compensation. Some buyers are insisting on air shipment of goods instead of the usual sea route. Additionally, factory closures have halted production, exacerbating the losses.
According to preliminary estimates from industry associations, the garment and textile sector has incurred losses of approximately $800 million over the past five days due to these four layers of disruption. Furthermore, the orders lost during the communication blackout are estimated to be around $4 billion.
Mobile internet services were suspended on the night of July 17 when violence and clashes spread across the country during the “complete shutdown” programme called by the Boishommo Birodhi Chhatra Andolon, the platform advocating for quota reform in government job recruitment at all grades.
When the situation worsened, broadband internet services were also shut down on the night of July 18. Subsequently, the government declared a general holiday and imposed indefinite curfews, leading to the closure of all industrial establishments.
After a prolonged shutdown, factories and industries across the country resumed operations on July 24.
Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), told the Business Post that the garment sector suffered the most due to the internet blackout. He estimated that orders worth approximately $4 billion were lost to competitors.
The inability to communicate with buyers left them anxious and uncertain. Since the partial restoration of internet services, some buyers have cancelled orders, others have demanded compensation, and some have insisted on air shipping goods from ports instead of the usual sea route.
It has been reported that garment manufacturers have requested a one-year loan at 2 per cent interest from banks to pay workers' salaries in July to recover from losses, and a plea has been made to the finance minister in this regard.
Reports indicate that the garment sector requires approximately Tk 5,000 crore each month to pay wages. Mohammad Hatem said that they have also requested the Bangladesh Bank to suspend all loan instalments and interest payments for the next six months.
According to Hatem, 80 per cent of garment sector owners are currently in a critical condition, comparing it to being in the ICU. Without government assistance, it is impossible to recover, and many factories may default on loans and shut down.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President SM Mannan Kochi noted that the garment export sector has incurred a loss of Tk 11,050 crore due to the closure of industries.
“Additionally, the production sector alone has suffered losses of Tk 7,400 crore. Apart from this, establishments in the washing and linkage sectors have lost approximately Tk 3,000 crore,” he said.
“The supply chain completely collapsed during this period, workers did not receive their wages, and interest on bank loans will still need to be paid later. The overall impact has been devastating,” he added.
It has been reported that the garment sector lost some production and export opportunities during the shutdown caused by the recent unrest. The marketing of garments was also affected, resulting in financial losses for factories and disruptions in the supply chain. Industry stakeholders view this situation as a significant blow to the sector, which is already struggling to survive amid national and international financial crises.
In a move to provide some relief to businesses, the government has agreed to waive the delay fees on imports and exports for the period when port services were halted. State Minister for Shipping Khalid Mahmud Chowdhury announced it during a press briefing following a meeting at the Secretariat last Sunday.
