RMG makers list hurdles to $50b exports by 2021

Bangladesh needs to address the challenges of energy, skilled human resources and poor infrastructure promptly to reach the target to export apparel items worth $50 billion by the end of 2021, industry insiders said yesterday.

“Poor infrastructure is the main challenge to the growth of our exports. It takes about one day to transport goods from Gazipur or Narayanganj to Chittagong Port,” said Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

He was presenting a keynote paper on the 'RMG Sector: Challenges & Way Forward' organised by the daily Dhaka Tribune at the Cirdap auditorium in the capital. Zafar Sobhan, editor of the daily, moderated the programme.

A shortage of electricity and gas is a major challenge, Islam said. “It should be mentioned here that while it costs only Tk 6 to produce per kilowatt-hour electricity from government run power plants, it costs Tk 16.7 for the same from a diesel-run generator.”

He also identified the higher cost of production, high bank interest rates and a lack of trained human resources as some other challenges to achieving the target for 2021.

The main challenge for the Bangladesh garments sector is price, said Abdus Salam Murshedy, a former BGMEA president.

After the fire incident at Tazreen Fashions and Rana Plaza building collapse, the cost of production has increased significantly, but retailers do not pay higher prices for apparel items, Murshedy said.

Although the Accord and Alliance already inspected the factories, they did not approach any retailer to increase the volume of work orders from factories housed in shared buildings, he said.

Mesbah Rabin, managing director of Alliance, identified five specific challenges to the sector -- finance to remedy the factory buildings, safety in the factories that are not under the purview of the Accord and Alliance inspection, relocation of factories from Dhaka to other places, policy for subcontracts, and departure of Accord and Alliance after 2018.

Both the Accord and Alliance will continue inspecting factory buildings till June 2018, but he is concerned whether the workplace safety programmes will continue after departure of the agencies.

Srinivasa Reddy, country director of International Labour Organisation in Bangladesh, said the country has done much for workplace safety and workers' rights after the Rana Plaza building collapse.

“Now the factory buildings should be remedied,” Reddy said. “The garments sector in Bangladesh is going in the right direction.”

A mechanism should be adopted by the government, BGMEA and Bangladesh Knitwear Manufacturers and Exporters Association to take responsibility of monitoring the factory buildings after departure of the agencies, Reddy added.

Rob Wayss, executive director of Accord for Bangladesh operations, said after completing the inspection of more than 1,100 factories, the agency made a recommendation to close 25 factories.

Tofail Ahmed, commerce minister, said the main challenge of the sector is the propaganda spread by a section of people, who do not work in the factories but demonstrate against the sector in Bangladesh.

On restoration of the GSP status to the US market, Ahmed said Bangladesh will not need this trade privilege as the country is heading forward despite paying higher duties.

On amendments to the Export Processing Zone law, the minister said the government cannot introduce trade unionism in the factories housed inside the EPZs as the foreign investors do not want it.

These foreign investors want continuation of the Workers Welfare Associations, which are considered as trade unions to protect workers' rights.