Garment exporters count losses as blockade lingers

Second from left, Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association, speaks to the media at a briefing at the BGMEA headquarters in Dhaka yesterday. Photo: BGMEA

Garment exporters yesterday urged politicians to find a solution to the ongoing political impasse as the nationwide transport blockade cost the industry Tk 450 crore in the last 12 days.

"Keep the sector alive. Please, ensure a safe supply chain, resolve the current deadlock and guarantee congenial business climate,” said Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association or BGMEA.

"Otherwise, it will not be possible for us to shoulder this burden," he told reporters at a media briefing at his office at the BGMEA headquarters in Dhaka.

Islam said since the blockade began, some factories have been forced to go for air shipments to supply products to buyers on time; many others have faced financial damages because of discounts, order cancellations and deferred payments.

In 2013, the sector had to bear air shipment bills of Tk 5,000 crore and offer discounts worth Tk 9,000 crore because of political turmoil.

The real production in the garment sector is valued at Tk 430 crore per day. So, if half of it is disrupted, Tk 215 crore of output is damaged, said the BGMEA chief.

The garment sector, which is still smarting from two recent industrial disasters and political unrest in 2013, could lose business if the current political turmoil persists, said the head of the industry's lobby group. 

Islam said some worry is prevailing in the sector because of the ongoing political uncertainty.

“The sector is almost on the brink of a debacle. Politics is holding the sector hostage.

He urged the political parties to sit together to sort out their differences in order to keep the wheel of the economy rolling.

The garment sector accounts for 80 percent of the country's total exports and directly employs over four million people, mostly the poor from rural areas.

In addition, various forward and backward linkages industries have developed around the sector. The business of banks, insurance, shipping, clearing and forwarding agents, tourism, hotels and transport has thrived because of it.

Islam warned that if Bangladesh, the second largest apparel exporter in the world after China, loses its garment business, a huge number of people will be unemployed.

"This economy has no capacity to shoulder the burden."

"If we lose business and workers become jobless for political reasons, entrepreneurs will not take responsibility."

Since January 4, BNP and its allies have enforced transport blockades across the country to oust the government in order to make way for a new election.

"The garment sector is again going through a deep image crisis. When buyers see there is no political stability and security for life, they feel discouraged to place orders here."

This is the latest blow for the garment sector at a time when the $25 billion-a-year industry is gradually shaking off the negative impacts of a political crisis in 2013 and the Rana Plaza and Tazreen Fashions fire disasters.

Islam said following the collapse of Rana Plaza, factory owners borrowed money from banks to improve working conditions and safety standards at their units, sending a positive message to international buyers.

"Buyers are slowly regaining their trust in Bangladesh's exporters, and the factories have started to receive more orders." 

After Christmas, this is the time for buyers to come to Bangladesh and place orders for fall this year, he said. "But they are unable to come to Bangladesh because of uncertainties."

The garment sector has more or less remained out of the purview of any political programmes, such as strikes in recent years, he said. Besides, exporters and importers are being able to transport their goods through the Dhaka-Chittagong highway under police security, he added.

“However, this is not normal. We collect various accessories from local sources from parts of the country. Our supply chain is disrupted for the blockades and strikes."

The country could fail to reach its $26.94 billion garment export target for the current fiscal year due to this spell of political unrest, he said.

In the last six months to December, garment exports brought home $12.02 billion, which is 4.88 percent below the half-yearly target of $12.64 billion, said the BGMEA chief.

"It is not acceptable that you will carry on your political activities at our expense."

The cost of doing business in Bangladesh is going up while that of the competitor countries is going down, he said. As a result, buyers are moving to those countries, he added.

He urged the political parties to keep all backward and forward linkage industries and goods-laden trucks and covered vans out of the purview of all political programmes, including blockades.

Areas or regions, including the Dhaka-Chittagong highway, that supply accessories to the garment industry should be kept out of the purview of political programmes as well, he said.

BGMEA Second Vice President SM Mannan and Vice President Shahidullah Azim were also present.