Don't depend exclusively on stimulus packages
The first wave of the Corona pandemic had snatched away RMG work orders worth Tk 31, 290 crore - between the months March to December last year. As the RMG sector continues to feel the pinch, a new dilemma has added up.
On one hand factory owners have been counting losses because of cancelled orders, while on the other they have been reluctantly paying interest rates to banks because of importing huge amount of raw materials for production. Even though, production at most factories haven't begun in full swing, but (Bangladesh Garments Manufacturers and Exporters Association) BGMEA authorities have sought further bailout funds from the government to pay workers for another three months.
The point, however, no sector can be kept afloat with state-sponsored incentives for a long term. And the question, however, where have the hefty profits gone, earned by our factory owners in recent years?
In the midst of uncertainty and apprehensions , a good news is that a recent CPD report has stated that job uncertainty among Bangladesh's garment workers has been alleviated to 4 per cent in September last year from 36 per cent in April. Moreover, some 60 per cent factories have started recruiting workers afresh. And with a vaccine available for all within the next 2-3 months, the prevailing uncertainty in the RMG sector, as well as for the rest of the world is likely to improve manifolds.
Understandably, domestic solutions are not enough to address the fallouts, but at the same time the RMG sector has also received foreign donations from the European Union, Germany and other countries. Tk 50 crore was available with the Ministry of Labour and Employment for disbursement through social safety net programmes among workers retrenched during the pandemic. And the commerce minister has given a clear hint that more time would be allowed for repaying the stimulus package loans. Additionally, Bangladesh Bank has undertaken a business-friendly initiative, announcing that no one will be considered a loan defaulter till June.
In these testing times, we expect our factory owners to focus more on long term sustainable solutions, not stop-gap measures by asking for further stimulus packages. Moreover, it was sad to note that our factory owners failed to avail regional cooperation in sourcing raw materials during the pandemic, so a stronger sub-regional cooperation is very important for the sector.
What's missing is the greater cooperation among the government, retailers, factory owners, union leaders, workers and governments of countries sourcing products for overcoming the sector's challenges.
It's time to focus on this critical issue.