The export-oriented apparels sector of Bangladesh has been struggling to recover from the COVID-19 related challenges. Stimulus packages have helped the sector to face multiple shocks and vulnerabilities. However, the process of resilience and recovery of the sector is likely to slow down and will require a longer period of time. It is observed that most of the small factories did not apply for the loan due to the complexity of obtaining the loan. Unlike 90 per cent large factories, only 40 per cent small factories applied for it. There is also an importance in understanding the resilience and recovery of RMG enterprises after the initial phase. Overall, the resilience of the RMG sector is very low (resilience index of the RMG sector is 46 out of 100).
These observations emerged at the virtual dialogue titled, “Vulnerability, Resilience and Recovery in the RMG Sector in view of COVID Pandemic: Findings from the Field Survey“. The dialogue was organised jointly by the Centre for Policy Dialogue (CPD) and Mapped in Bangladesh (MiB) [Implemented by the Centre for Entrepreneurship Development (CED), Brac University] and was held on Saturday, 23 January 2021.
CPD’s Executive Director, Dr Fahmida Khatun delivered the welcome remarks. She shared about the CPD-MiB study. This study has assessed RMG enterprises’ level of resilience and recovery during the longer time period. A nationally representative sample survey has been conducted over 610 RMG enterprises with a view to assessing the vulnerabilities, resilience and recovery process in the sector. Based on the analysis, a number of forward-looking policy suggestions have been put forward for the development of the RMG sector in the medium term.
The dialogue was moderated by Mr Syed Hasibuddin Hasib, Project Manager, MiB. In his introductory remarks he discussed about the various aspects of this research and noted the importance data in this regard.
In the keynote presentation, Dr Khondaker Golam Moazzem, Research Director, CPD recommended that it is important to make the application process for stimulus packages easy to apply, particularly for small scale enterprises. Government should make it part of compliance requirement of factories to pay workers’ wage payment through MFS/bank account/agent banking suggested by Dr Moazzem. There is wide gap between the information on laid-off informed by the factories and the total employment loss during the COVID period. As many as 3.5 lac jobs had been squeezed during January-September, 2020 period which was about 13.9 per cent of total employment of the sector. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) should cooperate to identify the actual number of laid off workers and submit the list for making necessary payments under social safety net. Also, safety measures for the workers need to be upgraded in factories. The future development of the RMG sector should consider more foreign direct investment (FDI) in the different segments of the value chain.
Ms Shirin Akhter, MP, Member, Parliamentary Standing Committee on Ministry of Primary and Mass Education, Government of Bangladesh joined the virtual dialogue as the Special Guests and highlighted the contribution of female garment workers. Despite facing many challenges during this pandemic, the garment industry is slowly trying to turn around. A focus on good governance and further enhancing our capabilities for emergencies are need to look upon. Various incentives announced by the government should remain under observation to ensure whether they are reaching everyone properly. Particular attention needs to be given to those who have lost their jobs or closed down their factories. Workers must be trained and health issues should be ensured. It is also necessary to see that the workers get their minimum wage. She also thinks, there is a need to discuss when workers would be vaccinated against COVID.
Mr Mohammad Hatem, First Vice-President, BKMEA was present as the Guest of Honour and talked about the challenges faced by the small factories regarding disbursing the labour salaries through a banking channel, since, labours do not usually have all papers. A Discussant at the dialogue Professor Mohammad Abdul Momen, Director, BGMEA agreeing to the proposal of disbursement of salaries through banking channel said, an easier credit system is needed for small business owners’. Also he talked about the COVID issues, profitability and buyers’ responsibility in the supply chain along with the changed reality of fast fashion and online shops.
The Chair of the dialogue, Professor Rehman Sobhan, Chairman, CPD talked about the health risks of workers in COVID situation. He also proposed a social security insurance for workers, in which employers, workers, government officials, buyers and development partners would participate.
Although this study concerns the overall condition of the RMG sector, there is an opportunity to separately pay attention to the risks posed by the pandemic, stated by Dr A K Enamul Haque, Professor, Department of Economics, East West University. Ms Taslima Akhter, Coordinator, Bangladesh Garment Workers Solidarity focused on the importance given to the health risks of the workers which should be considered first and foremost. Mr Miran Ali, Director, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Managing Director, Misami Garments Ltd was present on the dialogue as discussants.
Professor Dr Rahim B Talukdar, Adviser, CED, Brac University delivered the closing remarks.
High-level policy makers, political leaders, academics, development practitioners, business leaders, civil society activists, international development partners and journalists also took part at the dialogue.