Massive garment sector job losses likely this month
A considerable number of garment workers might lose their jobs this month as factories are now running at 55 per cent of their capacity because of a thin flow of work orders for the global coronavirus pandemic, said a top leader of the sector yesterday.
"Job and work order situation might turn even grimmer in future as it is not clear what will happen in the coming months of July and August," said Rubana Huq, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
The factory management must follow the labour law strictly in case of termination of workers, she said.
The international retailers have already cancelled work orders amounting to $3.15 billion as a result of which many factories may face either closure or termination of a large number of workers.
About 99 per cent of the factories have experienced work order cancellation and the buyers are not saying anything clearly about payments, she said.
Only 26 per cent of the buyers who previously scrapped orders have assured suppliers of receiving the shipments but dictated payment terms for renegotiation.
"Although most of the remaining buyers agreed to take the goods, they did not set any specific time and payment terms. Some of the buyers did not even respond to our calls," Huq said, while addressing a virtual event for the inauguration of a coronavirus testing laboratory for garment workers.
Citing a report of McKinsey & Company, she said consumption of goods, especially clothing items, plunged 65 per cent globally because of the pandemic.
"So, it is perceived that consumption will not improve anytime soon."
Huq said they will take the responsibility of the workers who lost jobs in April and May because of the stimulus package that the government has given them to pay staff salaries.
However, if the production and work order situation improves, the management will reemploy the terminated workers on a priority basis, she said.
The garment sector has faced damages worth $5 billion due to the pandemic.
"And this loss is irrecoverable."
Huq, however, sees some light at the end of the tunnel: shipment may look up ahead of the next Christmas.
Moreover, the US slashed the purchase of apparel from China by 52 per cent -- and Bangladesh might be an alternative destination for the American brands.
Bangladesh needs to diversify its export basket and go for athletic and technical garments as their demand is on the rise globally, the BGMEA president said.
She called upon exporters to make more garment items from manmade fibre as currently 74 per cent clothing items in Bangladesh are produced from cotton fibre, which is witnessing a falling demand in the global market.
Bangladesh exported $24.47 billion worth of garment items in the first ten months of the fiscal year, down 14.11 per cent year-on-year, according to data from the Export Promotion Bureau.
Huq also urged the government to take up an unemployment scheme for the retrenched workers for whom the EU and Germany gave an assurance to grant €113 million.
Some 46 garment factories could not pay 18,000 workers their salary for April yet, she said.
The BGMEA has been negotiating with buyers with the help of international organisations for payment. But, so far payments amounting to $134 million cannot be negotiated because some buyers in Europe and America have already applied for bankruptcy, she added.
The government has been working to improve infrastructure and ease of doing business for attracting more investment from China and Japan, said Salman F Rahman, adviser to the prime minister on private industry and investment.
Commerce Minister Tipu Munshi said the government is trying to increase the shipment of pharmaceuticals, leather and leather goods, bicycles, furniture and light engineering products.
Zahid Maleque, health and family welfare minister; Shafiul Islam Mohiuddin, former president of the Federation of Bangladesh Chambers of Commerce and Industry; and Atiqul Islam, mayor of Dhaka North City Corporation, also spoke.