Published in The Daily Star on Monday, 30 June 2014.
excerpt from the supplementary on round-table discussion “Macro Review of the RMG Sector: Gains, Challenges and Policy Responses” held on 24 June 2014.
Dr Khondaker Golam Moazzem , Additional Research Director, Centre for Policy Dialogue (CPD)
We need to see whether the government is actually giving the same kind of policy support to the garments sector as it did in the 1980s or 90s. Today’s garments sector is not the same as what the sector was three decades ago. There have been several changes. These changes need to be addressed and amendments need to be made to existing policies.
The garments industry is yet to accept and work according to the rules and regulations set by the government and to talk about ‘good enough’ compliance in this environment would mean that the factories are asked to opt for something below the set rules and regulations. We don’t have the space to go below the set rules for compliance as there are already many flexibilities existing within the compliance rules set by the government.
There are two types of costs that should be regarded when talking about compliance costs, the first being fixed costs and the other being variable costs. If we place these two costs under the operation costs of factories, it will not be a huge sum. If we talk about relocation costs of non-compliant factories, we need to consider that the depreciation costs of these factories should already be accounted for. Considering the profit structures set by these factories, they earn their returns in several layers. Thus, even if we talk about relocation costs, this should be accounted within the existing costs of the factories.