Export-oriented factories to reopen

The government has given consent to the export-oriented factories to resume production from today, 1st August, despite the ongoing lockdown. The permission comes with the condition of complying with all health regulations as per order of the ministry of health. Understandably, the decision was welcome by the manufacturers and they now look forward to busy days ahead to boost production and prepare to fulfill the export orders.

It is being stressed by the trade bodies that if manufacturers cannot go into production immediately to meet the export deadlines, the country will lose orders worth billions of dollars. No doubt, for a developing country like Bangladesh those are big numbers.

Bangladesh’s RMG sector has taken some bad blows in the last two years because of frequent shutdowns for Covid-19 pandemic and cancellation of orders. As a result, many factories had temporarily pulled down shutters. Many workers lost their jobs during the pandemic. When they got infected by the deadly virus, they had to fight it out alone with no money or other support available.

The plight of the RMG sector during the pandemic hit international media headlines a number of times in the last two years. It has been widely reported that global demand for readymade garments and fashion brands plummeted because of Covid pandemic and big retailers were reluctant to place large orders, which spelled disaster for the sector. One report says that in 2020, textile exports from South Asian countries dropped by nearly 17 per cent. Shipments to Europe, which is the destination for 60 per cent of Bangladesh's garment exports, recorded a significant decline of nearly 19 per cent.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) revealed that apparel exports declined by 5.83 per cent year-over-year in January 2021. It predicted that based on current scenarios and the global trade or economic outlook, it appears that exports may continue to suffer till the third quarter of this year (2021). We may cite one example here to explain the situation in Bangladesh. One vice-president of BGMEA told the media that until mid-January, 24 per cent of their existing orders were postponed. He also expressed concern that they might see a 30 per cent order loss.

Already stories of stocks pile up over the past one year has reached the trade bodies and BGMEA.  Global fashion brands continue to cancel orders from local suppliers. Britain's Marks & Spencer and Germany's Hugo Boss, for instance, said they had placed smaller orders than usual for this year’s spring collection. Swedish firm H&M said a drop in demand worldwide will inevitably have an impact on their purchases.

The retailers also said they were keen to work closely with suppliers to find solutions to support garment workers. Many of them have joined the ILO global call to action where they are working together with the ILO and trade unions to establish social protection systems.

We may recall that the European Union is Bangladesh's biggest garment export market, while the US is the largest single-country market. In 2020, Bangladesh's textile exports to the EU dropped by nearly 19 per cent, whereas to the US they fell by 16 per cent and to Canada by as much as 25 per cent.  Therefore, there is no denying, Bangladesh needs to turn around despite Covid threat and start the factories as the sector accounts for more than 80 per cent of overall exports. About four million workers are employed by the garment industry with most being female workers. The sector rightly needs full support of all the stakeholders.

Livelihoods of millions of people depend on industries. The workers are suffering a lot as their factories are now are under lock and key. We urge the government to open other industrial units in addition to the garment factories, maintaining the strictest health standards.