Published in Daily Sun on Wednesday, 18 March 2015.
Hi-tech to cut 20pc RMG jobs
Monirul Alam
Some 20 percent of a total 4 million workers in Bangladesh’s readymade garment industry will lose their jobs in the next few years as the factory owners are adopting new technologies and replacing old machinery with hi-tech ones—which will displace many workers.
All the woven, knit and sweater factory units have been brought under such upgradation plan. In last couple of years, around 70 percent of the sweater factories were modernised, which made hundreds of workers jobless.
“One machine will replace at least four workers. It will reduce our salary burden. We look for better technology to reduce cost, production time and enhance quality of products,” said Md. Shahidullah Azim, Vice President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Managing Director of Classic Fashion Concept Ltd.
The RMG industry that employs 4 million workers has become the economic powerhouse of Bangladesh with $ 24.5 billion annual exports in 2013-14 fiscal. The industry has been driving the country’s economic growth by contributing to the income of banks, insurance, shipping, transport, tourism, engineering services, backward and forward linkage industries, logistics, real estate and all above, towards an equitable social development.
Bangladesh’s economy is in a transition towards attaining the middle-income status by reducing poverty owing a large part to the RMG industry. In such a time, such huge job cut in the apparel industry may hinder the social development as a large number of people will be leaving out of income.
“The industry is now competitive enough. It has already overcome many odds. Time has come for the entrepreneurs to think of social development by ensuring the welfare of the workers,” said Khondaker Golam Moazzem, additional research director of the Centre for Policy Dialogue (CPD).
He said both the RMG-sector trade bodies and the government have a role to play to accelerate growth in the apparel industry.
“Trade bodies like BGMEA and BKMEA may help the small RMG entrepreneurs to find new markets while the government can ensure tariff benefits by diplomatic efforts,” he said.
The WTO (World Trade Organisation) in 2011 had declared Bangladesh as the second largest RMG exporter after China.
According to WTO, Bangladesh holds 4.8 percent of the global RMG trade of $ 412 billion.
According to McKinsey & Company, an international management consulting firm, Bangladesh’s apparel exports will reach $36 billion by 2020. Some key market players believe that the prospects are even brighter for Bangladesh’s RMG sector.
The government and the industry owners set a target of $50 billion RMG export by 2021.
It took three decades of hard work for the country’s garment sector to achieve its position today.
The journey started in 1978, with a shipment of 10,000 pieces of men’s shirts to a French company by Reaz Garments Ltd.
The US authority has suspended the Generalised System of Preferences (GSP) facility for Bangladesh in 2013 on grounds of inadequate labour safety and related issues.
Later a host of initiatives supported by the ILO, Alliance and Accord started to be implemented in the RMG industry to improve compliance standard of RMG units here.
The US authority in January said though Bangladesh has made significant progress in improving the compliance standard, it needs to do more to get back the GSP status.