Bangladesh apparel factory workers, owners face uncertainties

The country’s readymade garment exporters and workers passed the year 2020 through uncertainties and anxieties amid the coronavirus pandemic that caused export slumps and heavy job losses in the highest export-earning sector.

The revenue from the apparel exports in the year witnessed a 16 per cent dip while more than one lakh workers in the sector lost their jobs as the pandemic rendered the global business stagnant.

RMG exporters said that 2020 was a year of trepidation for them as they still carried the $1.96 billion back-to-back liabilities as buyers failed to pay them.

Labour leaders said that the year pushed the workers through daily nightmare of losing job and income due to the pandemic-induced economic downturn.

Along with the livelihood uncertainties, workers faced high risks of infection as the health safety measures were not adequate in the factories to prevent COVID-19, they said.

Both exporters and workers said that brands and buyers in most cases failed to uphold ethical business practices after the COVID-19 emerged as a pandemic.

The country’s RMG sector fell in trouble right from the beginning of the year after the virus was detected in China in November 2019 as Bangladeshi RMG exports largely depended on raw materials from that country.

Export Promotion Bureau’s provisional data showed that Bangladesh’s RMG export earnings in January–November 2020 fell by 16 per cent to $24.82 billion from $29.56 billion in the same period of 2019.

The country’s RMG exports in April 2020 witnessed a drastic fall as the demand for apparel shrank on the global market and the production remained suspended at home in the month due to the COVID-19 onslaught.

The income from apparel export in April 2020 plummeted by 82.85 per cent to $520.01 million from $3.03 billion in the same month of 2019 as the coronavirus detected in Bangladesh on March 8 forced most of the factories to keep their operation shut during the month.

The RMG exports that account for some 84 per cent of the total export earnings started bouncing back in August and September but the shipment fell again in October due to the pandemic’s second wave in Europe and the United States, the major markets of Bangladeshi RMG products.

‘It was a year of trepidation and angst. After having orders worth 3.18 billion dollars cancelled, waking up to daily nightmares of price discounts, deferral of shipment and payments and endless discussions became a part of our routine,’ Bangladesh Garment Manufacturers and Exporters Association president Rubana Huq told New Age on Saturday.

The brands of course suffered, but the exporters suffered more, said Rubana.

The 41 lakh people engaged in the sector faced uncertainties and the entrepreneurs who built their factories with the hope of expansion and future growth faced a dark time, the BGMEA president said.

‘Eventually, after the brands reinstated 90 per cent of their orders, we still had to face the back-to-back liabilities of $1.96 billion, which remained unpaid, because of non-payment by buyers or their bankruptcy,’ the apparel industry leader said.

She identified uncertainties over the placement of orders from buyers’ end, lack of working capital for small and medium enterprises, bankruptcy of brands, deferred payments and price discounts as the challenges for the RMG sector that employs the largest chunk of the country’s women workforce.

‘The challenges also include the dip in the consumer index this year. The November consumption dropped by 13 per cent in Europe and by 16 per cent in the USA while we suffered a 5.19 per cent fall in the price,’ Rubana said.

According to BGMEA data, a total of 1,134 member factories of the trade body faced cancellation or holding up of export orders worth $3.15 billion until April of 2021 due to the pandemic.

Data showed that a total of 418 garment factories met with temporary or permanent closure from March to May due to the pandemic.

Local and global rights groups claimed that the pandemic had adversely impacted the livelihood of RMG workers as factory owners had indiscriminately retrenched workers.

Labour leaders claimed that more than one lakh RMG workers lost their jobs amid the pandemic while the BGMEA said that the figure was 76,000 with nearly 40 per cent of them reinstated in recent months.

Global labour rights advocate Clean Cloth Campaign estimated that the RMG workers in Bangladesh lost $501 million or 29.5 per cent of their total monthly wages from March to May.

Towhidur Rahman, former secretary general of IndustriALL Bangladesh Council, said that 2020 was a year of uncertainties for the workers, too.

While more than one lakh RMG workers lost their jobs, thousands others suffered wage cuts in the year, he said.

Towhidur, also president of Bangladesh Garment Industry Workers Federation, alleged that the treatment of RMG workers by factory owners was not responsible and workers in the sector in general suffered physical and mental problems due to the additional pressure of work at factories.

The government and the BGMEA, he said, have provided health guidelines for the workers but many factories have failed to comply with the guidelines.

Towhidur blamed international buyers for not going by ethical business practices, saying that the cancellation of work orders and reducing the unite prices of products took a toll on the workers.

According to a research conducted by Transparency International Bangladesh, most of the government initiatives amid the coronavirus crisis were for protecting the business interests of the factory owners while measures for protecting workers’ interests were not visible.

About 14 lakh or 42 per cent of the workers in the country’s RMG sector did not get benefit from the stimulus packages provided by the government to pay the workers’ wages amid the COVID-19 outbreak, TIB said.

TIB executive director Iftekharuzzaman said that RMG factory owners were politically influential and their clout influenced the decisions about both the allocation and the disbursement of funds.

It is disappointing that factory owners were unwilling to recognise the high contribution of workers to the RMG sector, he observed.

Terming the government incentives discriminatory, he said that though the RMG sector’s contribution was 10 per cent of the country’s economy, almost 50 per cent of the total stimulus fund was allocated to the sector.