Originally posted in The Business Standard on 10 May 2021
Almost one-fourth of ready-made garment (RMG) factories in the country have sacked their workers even after receiving the government’s stimulus package.
The government allocated a Tk 5,000 crore stimulus package for the RMG sector to compensate for losses caused by work order cancellation and other financial difficulties caused by the deadly pandemic. In fact, the government took the decision to save the export-oriented garment industry as well as to ensure that RMG workers do not lose jobs in the midst of the deadly pandemic.
However, many workers lost their jobs. The Centre for Policy Dialogue (CPD), one of the country’s leading think-tanks, found in a survey that almost one-fourth of ready-made garment (RMG) factories in the country have sacked their workers even after receiving the government’s stimulus package.
I will not say the stimulus has not worked. There are many garment owners who have received the stimulus and paid their workers’ salaries. The significance of the stimulus can be better understood in light of the fact that entrepreneurs were experiencing additional financial difficulties at the time, particularly in May and June, as buyer orders were decreasing. The subsidised credit from the government helped the factory owners to stay afloat.
However, all were not that lucky. Not all entrepreneurs got the opportunity of getting the government stimulus package due to different terms and conditions. Around 17% of the garment factories did not get any stimulus package. Moreover, there are many factory owners who did not even apply for it.
Again, there were still some factory owners who badly needed the stimulus package but could not apply for that because their factories did not meet the conditions for getting the stimulus. For example, to access the stimulus loan a factory will have to be a member of the BGMEA or BKMEA. It will have to keep open for the previous month and to be in operation in the previous years.
As a result, many factories are having to incur a heavy loss, as well as the workers of those factories, are losing their jobs while the pandemic continues to run rampant.
One of the many conditions to get the government stimulus was that the factory owners cannot lay off their workers amid the pandemic after receiving the government stimulus. However, a significant number of factories have taken advantage of the opportunity to receive stimulus while also firing their workers. Thus, they have breached this condition to get the stimulus.
We have found that as many as 25% of garment factory owners surveyed have got the stimulus and they have fired their workers. Moreover, the workers have been deprived of their basic rights. In fact, those who have been sacked in the midst of the pandemic did not get the benefits of laying off.
By this survey, we wanted to tell the government that they should take a broader approach so that other factories can get the same opportunity. Another side is that the government should have monitored whether conditions are being abided by. It should be monitored so that such anomalies do not take place in the future.
We applaud the initiative to provide them with subsidised credit, but the government must also ensure that the conditions of these credits are not violated by anyone who has received the benefit.
As a trade body, BGMEA also had a role to play in monitoring because individual factory owners needed to get approval from them to get government stimulus. The trade body has to warn their members to refrain from firing workers. The body can also monitor whether there is any termination of work going on in the industry. The BGMEA could also make sure that the workers who were fired got the benefits they were supposed to get.
There was also a crisis management committee made of representatives from BGMEA, workers and the government. This committee was supposed to look after these matters. Had they done their duty properly, then this kind of incident could have been avoided.
The government initiated the stimulus package so that the salaries of the workers can be paid. The sacking of the workers cannot be an excuse in the midst of the pandemic, at least from April to July, as during that period, the government lent the RGM factory owners a helping hand.
Unfortunately, a section of the garment factory owners did not comply with the conditions attached. As a result, many workers, in the midst of the ongoing pandemic, have been living an inhuman life. But, the plight of the workers has come down a bit after the reopening of the garment factories.
Dr Khondaker Golam Moazzem is the Research Director of Centre for Policy Dialogue