Business leaders expect recovery by mid-2021
Several business leaders and entrepreneurs have expressed their hope that Bangladesh's economy will start to recover from mid-2021 after the Covid-19 vaccine arrives.
"We expect the garments sector to recover from June 2021," said Rubana Huq, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
With a vaccine already being disbursed in the UK and US, the Bangladesh government signed a trilateral deal with Beximco Pharmaceuticals and the Serum Institute of India for three crore doses.
The coronavirus fallout on businesses was the most memorable aspect of 2020.
Besides, the ongoing crisis has exposed the garment sector's vulnerability to forced closures and contract losses, Huq said.
"We will mainly consolidate our business by decreasing operational expenses through restructuring while focusing on product diversification and securing new markets in 2021," she added.
Fazlul Hoque, managing director of Plummy Fashions Limited, also hoped that the country's economic recovery would start from June next year as the vaccine is all set to roll out in the market.
"We experienced some negatives and a lot of positives amid the Covid-19 outbreak," he said.
For instance, the lack of preparation for such a natural disaster was the main negative from Covid-19.
"But we have learnt that we could reveal our internal strength and resilience so after the first wave infections, we were recovering fast even though the second wave has started affecting us,'' Hoque added.
Still though, many look forward to expanding their business in 2021 in light of their hopes for recovery.
"We will expand our operations next year," said Rupali Chowdhury, president of the Foreign Investors Chamber of Commerce and Industry.
When the situation improves, the market will rebound and then product demand will rise, said Chowdhury, also the managing director of Berger Paints Bangladesh.
However, the demand for more expensive products will rebound faster compared to the goods meant for middle- or lower-income consumers. For instance, the recovery of clothing will be slower compared to gold and other luxury items, Chowdhury said.
"I think 2021 will go slow and so will the recovery but after June, the situation will start improving," said AK Azad, former president of the Federation of Bangladesh Chambers of Commerce and Industry.
Like Chowdhury, Azad also plans to expand his spinning and textile business which will specialise in high-value garment items in 2021.
"The learning from the Covid-19 fallout is how we can reduce the overhead costs like bank loan, cost of operations and bank borrowing," added Azad, managing director of Ha-Meem Group.
According to Rizwan Rahman, president of the Dhaka Chamber of Commerce and Industry, although a V-shaped recovery trajectory was previously forecasted, Bangladesh's economy will likely experience a U-shaped recovery due to a prolonged outbreak.
"The correlation and nexus of the private sector and economic growth has always been evident and considering this, economic recovery through private sector improvement should be prioritised," Rahman said.
Bringing the private sector's competitiveness and confidence back to pre-pandemic levels should be of utmost importance going into 2021, he added.
According to Rahman, the DCCI worked to support the private sector and ensure economic revival amid the ongoing pandemic.
"We also highly prioritised low-cost and flexible financing sources for enabling the revival of the private sector as it is the lifeline of economic development," he said.
Like the DCCI president, Ali Reza Iftekhar, managing director and CEO of Eastern Bank, said small businesses were hit hard by the pandemic.
The second wave of coronavirus infections across the EU has only brought more cause for concern, he added.
Syed M Tanvir, managing Director of Pacific Jean's, said the apparel industry has been one of the worst affected industries by this pandemic. zIt is estimated that Covid-19 will wipe $297 billion from the global apparel market in 2020, a 15.2 per cent decline compared to 2019.
Although Bangladesh's initial recovery has been good, it is too early to gauge exactly how far the country has come given that its major export markets have been badly hit by a second wave of infections, said Tanvir, also director of the Chattogram Chamber of Commerce and Industry.
For many years now, the International Labour Organisation, retailers and brands have taught lessons on compliance but during the garment sector's darkest hour, their lack of follow-through has been exposed, said Mohammad Hatem, senior vice-president of the Bangladesh Knitwear Manufacturers and Exporters Association.
2021 will be a challenging year but a lot of opportunities will come at the same time, according to Saiful Islam, managing director of Picard Bangladesh.
"We received 30 per cent fewer orders for next season in the leather sector due to the outbreak," said Islam, also president of the Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh.