BGMEA again seeks govt support to pay Aug wage

The Financial Express

MONIRA MUNNI | August 25, 2020 


Apparel makers have again sought financial support from the government as loan to pay wages for the month of August amid the Covid-19 pandemic, sources said.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) made the demand to help sustain competitiveness of the industry that is hit hard by the ongoing corona virus outbreak.

To this effect, it sent a letter to finance minister AHM Mustafa Kamal on August 20.

Production in ready-made garment (RMG) units stayed suspended due to public holidays followed by the Covid-19 outbreak, BGMEA president highlighted in the letter.

“The industry has been severely affected due to the overall coronavirus situation, resulting in closure of many factories,” Dr Rubana Huq said.

The impacts of the pandemic on the economy have also been evident, she mentioned.

Citing statistics, she said since the outbreak, about $3.0-billion work orders have been cancelled/held while payments of previous shipments might be taking eight to nine months to receive.

Moreover, workers need to be engaged in production with paying their wages and allowances to continue to existing work orders and the new orders that are being placed, she stated.

“The industry is in a dire financial crisis because of the cancelled/held orders and delayed payments,” the BGMEA leader said.

She cited that many countries have offered financial packages to help their respective export-oriented sectors’ competitiveness globally.

Ms Huq urged the government to provide easy-term loan with low interest rate to pay wages for August as was provided for paying workers’ July wages.

Earlier, it allocated Tk 50 billion for export-oriented sectors to pay workers’ wages for three months, beginning from March, to face COVID-19’s impact.

But the total disbursement eventually stood at Tk 75 billion for the three months’ wages.

The additional Tk 25 billion has been disbursed to provide wage from the Tk 300-billion fund that was announced to supplement the working capital of industries to overcome the fallout.

Later, the government provided fund to pay July wages following the apparel leaders’ demand for the same.

According to the BGMEA, the sector received a total of Tk 105 billion to pay four months’ (April to July) wages.

RMG export fell by 20.14 per cent to $2.25 billion in March, 85.25 per cent to $374.67 million in April and 62.06 per cent to $1.23 billion in May.

Official data shows earnings, however, stood at $2.24 billion and $3.24 billion in June and July recording 6.63-per cent and 1.98-per cent negative growth.

Export earnings have seen a big jump with over 50-per cent growth in the first 19 days of August as exports reached $2.04 billion over that of $1.35 billion in the corresponding period of August 2019.

When asked, Centre for Policy Dialogue research director Khondaker Golam Moazzem, citing statistics, said apparel sector’s export growth is bouncing back in the current month.

As a result, sector entrepreneurs, though there might be some issues over price and payment, should pay wages on their own as they have the ability, he suggested. Mr Moazzem called for funding sectors like SME, informal sectors that need the support most or are yet to receive sufficient financial support or did not get any support.

munni_fe@yahoo.com