Mostafa Kamal Majumder
The readymade garment (RMG) sector is fighting two odds to keep its production and export performances rolling and has convened the annual Bangladesh Apparel and Textile Exposition (BATEXPO) from 10-12th of this month, one month ahead of the normal schedule of such expo.
Barely recovering from the pressure for compliance with safety procedures complicated by the Rana Plaza collapse that killed little over 1100 workers, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the association of owners of the industry, had to bring the date of BATEXO forward by a month from the normal time of November for fear of political trouble centring on the next general elections.
Yet they have set a higher export target of US$23 billion next year as against achievement of $21.5 billion export earnings in last fiscal, exceeding the target of 20 billion dollars. But whether the industry would be able to have a smooth sail by absorbing the twin pressure remains a big question.
President of BGMEA Mr. Atiqul Islam told the members of the Overseas Correspondents’ Association of Bangladesh (OCAB) they are facing pressure because buyers are in a competition to reduce prices of garment products in their own countries. Although the recession in
Europe shows sign of improvement, the US shutdown over their government’s budget might create new pressure because it had already made at least one million people jobless.
The US suspension of the Generalised System of Preferences (GSP) did not hurt the industry much in the last fiscal year, industry leaders said, but continuation of the suspension would elongate the negative image and might influence buyers of the European Union too (88 percent
of exports are concentrated in US and Europe).
Additionally new competition is coming from at least 12 countries which a re in a race to have a share of the cake and some old buyers
have preferred to invest in those countries instead of doing business by absorbing the hassle that has developed in Bangladesh.
A total of 88 retailers of Europe have formed an Accord and 22 others from North America an Alliance to inspect nearly 25,000 factory buildings to understand whether the factories housed in those conform to safety standards as per the Bangladesh’s building code, the labour law and relevant rules.
Atiqul Islam said their worries are mostly with the small and medium enterprises (SMES) that are housed in ‘shared buildings’ not with the 60 percent ‘purpose-made’ buildings which account for most of the exports. But the SME factories cannot be ignored because they also employ a lot of workers.
The BGMEA has taken an initiative to set up a specialised garment industrial zone in the Bausia area of Munshiganj, about 50 kilometres east of Dhaka, to overcome the compliance problems. The Japan International Cooperation Agency (JICA) has offered a funding support of Taka one billion at an interest rate of 5 percent to help strengthen the compliance aspect, but the banks through which the fund is being disbursed is charging 10 per cent interest. He urged the banks to add a two per cent service charge while disbursing the JICA fund for the benefit of the industry.
The industry leaders reiterated their concern at mysterious attacks on garment industries and called for ending those. We believe that political leaders both in the government and the opposition would give more considered attention to the needs of the sector that has been the
number one foreign exchange earner and the number one provides of industrial employment for more than two decades.
Mostafa Kamal Majumder