The two foreign factory inspection agencies -- the Accord and Alliance -- have become an encumbrance for Bangladesh for their stringent conditions, Finance Minister AMA Muhith said yesterday.
“The Accord and the Alliance are like a noose around the neck. It is the most concerning issue right now,” he said in a meeting with garment exporters at his secretariat office in Dhaka.
The rigorous inspection by the Accord and the Alliance is an attempt to stunt the progress of Bangladesh's garment sector, Muhith said.
“It is like, 'Bangladesh you have progressed a lot, do not progress anymore, now it's the time to pause'.”
The pressure by the Accord and the Alliance is “unfortunate”, he said. “It is an attempt to deter the progress of the industry, although we had opened our doors to them.”
Muhith said the government will sit down with the two parties soon to resolve the problems.
The Bangladesh Accord on Fire and Building Safety, a platform of nearly 200 retailers mostly headquartered in Europe, has inspected 1,700 of its sourcing factories.
The Alliance for Bangladesh Worker Safety, a platform of 26 North American retailers, has been doing the same on its sourcing factories, whose tally is more than 600.
The steep decline of the euro and the dollar is another real problem for the garment industry, according to Muhith.
Regarding the plea for a reduction in tax at source from the proposed 1 percent and waiver of the 1 percent duty on import of capital machinery, Muhith said he will discuss the issue with Prime Minister Sheikh Hasina and will consider their demand.
Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association, who led the delegation of garment makers, said the sector is set to miss its export target this fiscal year after the three-month political turmoil hampered shipments.
Between July last year and May this year, garment exports raked in $22.92 billion, which is up 5.51 percent year-on-year but below the periodic target of $24.26 billion.
Now, to meet the yearly target of $26.9 billion, some $3.98 billion has to be earned this month, the closing month of fiscal 2014-15.
The garment exporters could hardly send their shipments for three months from January to March, he said.
The strong performance by some competing countries such as India, Vietnam and Pakistan is another major reason for the fall, he added. The average export growth of the three countries is nearly 10 percent.
Islam also identified some short-term challenges, including lower productivity by workers, higher cost of production and a steep fall of two major currencies -- the dollar and the euro -- against the taka.
“It's time to find out the root cause of our problems for the sustainability of the garment business and to achieve our $50 billion target by the end of 2021," he added.