Considering the current high inflation, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan has urged the government to form a new wage board for readymade garment (RMG) workers.
“Workers are our main force. I previously urged the government to form a new wage board for workers. Now I am urging them through you [journalists] again to form it as soon as possible,” he told reporters at a press conference in the capital on Monday.
The existing wage structure for RMG workers was announced in December 2018, which will expire after 2023. It states employers are bound to increase workers’ salaries by 5 per cent every year based on basic wages.
But workers refused to accept the wage structure at the time and announced protests demanding a revision. After eight days of labour unrest in a row starting on January 6 in 2019, the government announced a revised pay structure.
The apparel workers’ call to raise their wages recently got louder as soaring inflation has made it difficult for them to bear daily expenses with the existing salaries.
Faruque talked about his recent Europe tour and the proposed budget for the fiscal year 2022-23 at the programme.
He said the finance minister had proposed increasing tax at source to 1 per cent from 0.5 per cent, which could be difficult in the present situation. “We think this is not the proper time to raise this tax.”
Faruque said global inflation had gone up, especially in the BGMEA’s export destinations, due to the Russia-Ukraine war.
“This has reduced the demand for our products, which will go down even further in the future.”
He mentioned a World Bank prediction which said global trade would reduce to 4 per cent in 2022 from 10 per cent in 2021 due to high inflation and unemployment.
“On the other hand, the government recently increased gas prices. That is why our exports will suffer,” the BGMEA president added.
The finance minister said in his budget speech he had depreciated the taka against the dollar by around 7.9 per cent in the current fiscal year. He also said all existing facilities had continued in the apparel sector.
Some economists and policymakers recently suggested the government withdraw or reconsider the existing 1 per cent special incentive in the RMG sector if factory owners demanded tax at source be reduced.
The BGMEA chief said, “The government has devalued taka, but our competitiveness has decreased due to high prices of raw materials.”
He further said the government would be able to increase revenue despite the increased tax at source if export capacity could be increased. “It will also help the macro economy.”
“We will invest the RMG sector’s incentive in the macro economy. Now we are facing trade deficits, and there are no alternatives but to increase exports. We are also creating employment,” Faruque added.
The finance minister also proposed imposing a 1 per cent duty on setting up solar panels in his budget speech. The BGMEA president said the government should withdraw this duty considering sustainable development.
BGMEA first Vice-President Syed Nazrul Islam, vice-presidents Shahidullah Azim and Rakibul Alam Chowdhury, and directors Inamul Haq Khan Bablu, Asif Ashraf, Abdullah Hil Rakib, Md Khosru Choudhury, Mizanur Rahman, Nabid Ul Haque, and Tanvir Ahmed were also present at the conference.