The global apparel value chain has experienced an unprecedented disruption in view of the COVID-19 pandemic. Unlike the earlier crisis, all kinds of activities across the value chain collapsed due to this pandemic, which adversely affected the up-and-down stream including apparel suppliers, workers, raw material suppliers, brands, and consumers. Despite various initiatives at the national level, the process of recovery in the medium term in major supplying countries, including Bangladesh is rather slow. More importantly, existing national-level measures have limited the role to ensure smooth recovery of the apparels enterprises. Addressing medium-term challenges requires innovative strategies and tools to tackle a prolonged period of demand slump. Hence, a collaborative approach between the government, brands and suppliers will be the key to ensure better recovery of the apparel sector.
These observations emerged at a virtual dialogue on “Recovery of the Apparels Sector from the COVID-19 Crisis: Is a Value Chain based Solution Possible?”, organised by the Centre for Policy Dialogue (CPD) in partnership with Southern Voice. The dialogue was held on Saturday, 16 January 2021.
While delivering the introductory remarks, CPD’s Executive Director, Dr Fahmida Khatun shared that these findings are part of a joint study being undertaken by the CPD and Institute of Policy Studies of Sri Lanka (IPS) in Bangladesh and Sri Lanka – two major apparel sourcing countries. She shared that the study explored a value-chain based solution for the suppliers of Bangladesh.
Dr Khondaker Golam Moazzem, Research Director, CPD while making the keynote presentation stated that the study found that the lack of initiatives of major market players has kept suppliers and the workers in uncertainty to address the medium-term challenges. Dr Moazzem also shared that major market players, including brands, buyers and governments of sourcing countries, will have to undertake responsible business practices (RBPs) for sustainable recovery. To ensure the earliest recovery, framework of a value chain based distributive approach was proposed in the presentation.
The Chief Guest at the dialogue, Mr Tipu Munshi, MP, Hon’ble Minister for Commerce, Government of Bangladesh stated that the government is trying to revive the trade through stimulus packages. In the medium-term, he suggested that Bangladesh should look for new markets through product diversification. He also called for a collective effort from the brands, buyers, manufacturers and the government.
H E Mr Harry Verweij, Ambassador, Embassy of the Kingdom of the Netherlands joined the virtual dialogue as Special Guests. The Ambassador agreed to the findings of the study presented and expressed interest in working collaboratively with CPD further in the future. He highlighted how the Government of Netherlands had advised its brands to not cancel orders even during the second wave of the pandemic. H E Mr Harry Verweij opined that despite the harm due to the COVID-19, the pandemic had opened an opportunity to move towards a people and planet positive garments industry.
The government is taking various social safety programmes like the workers’ welfare fund, said Mr K. M. Abdus Salam, Secretary, Ministry of Labour and Employment, Government of Bangladesh who was present as the other Special Guest at the dialogue. He stated that funds for such programmes are available, but a complete list of labours needs to be provided before distribution. Mr Salam also opined that sudden retrenchment of labours could be stopped through stronger employment policies.
Suggestion of regional response for assisting the supplier and the supply chain came from Professor Sobhan, Chairman, CPD. He also proposed a micro-insurance to ensure the security of the labours. Such social insurance programmes would also require a collaborative approach from the buyers, manufacturers and the government.
To a question by Professor Sobhan, Dr Rubana Huq, President, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Managing Director, Mohammadi Group, a Guest of Honour at the dialogue answered that the apparel sector of Bangladesh could take an inward-looking approach. Bangladesh can focus on local demand, as there is a lack of global demand. She also added that the small and medium enterprises (SMEs) are financially challenged during this pandemic, and the credit programmes are not reaching these firms.
Mr Syed Sultan Uddin Ahmmed, Specialist on Worker Activities, International Labour Organization (ILO), ACTRAV-South Asia, the other Guests of Honour at the dialogue emphasised that focus should also be given to the well-being of labour working for factories not under any association. Hence, he suggested forming a central security fund as a long-term solution for the labours.
The Distinguished Discussants at the dialogue also echoed for a collaborative approach of all stakeholders for the recovery of the apparel sector. Mr Amirul Hoque Amin; President, National Garments Workers Federation (NGWF) added that the manufacturers need to strictly maintain the two month period of lay-off and this rule should not be violated for the sake of labour’s interests. Sourcing countries need to show due diligence so that the buyers take the responsibility of the situation, mentioned Ms Kalpona Akter, Executive Director, Bangladesh Center for Workers Solidarity (BCWS). Mr Ziaur Rahman, Regional Country Manager of Bangladesh, Pakistan and Ethiopia H&M remarked that buyers are committed towards a higher minimum wage of the labours and even contribute to insurance of the labours. He further added that focus should be given on research and human resource development of the manufacturers.
In conclusion, the Moderator of the session, Professor Mustafizur Rahman, Distinguished Fellow, CPD stated that there is a wide group of stakeholders involved in the value chain process. To sustain the initiatives by the buyers and avoid market failure, a collaborative approach is vital. Professor Rahman suggested taking such collaborative approaches through initiatives like the global entrepreneur compact.
High-level policy makers, political leaders, academics, development practitioners, business leaders, civil society activists, international development partners and journalists were present at the dialogue.