By Jesmin Papri on Dec 26, 2019
Bangladesh’s garment industry, the engine of the nation’s exports, has shrunk since July and must diversify to stay competitive in the world marketplace, the head of the sector’s most powerful trade group told BenarNews in an interview this week.
The ready-made garments (RMG) sector has seen dozens of factories close and at least 29,700 workers lose their jobs, according to Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
“The last seven months we’ve had 59 factories closing down,” she said, referring to association members. “Apart from that, there are many more. So we can easily kind of estimate around 75 being closed down in the last seven months.”
“We need to remain competitive, we need to remain progressively aggressive in the sector, but we also need to realize that there are different diversifications that need to happen,” she added.
Huq said the sector should expand the types of garments it produces to compete amid a Sino-American trade war that has sent manufacturers fleeing from China to countries like Vietnam. Bangladesh produces shirts, trousers, jackets, T-shirts and sweaters, according to the BGMEA.
“It’s partly because of us not being able to take advantage of the U.S.-China trade war, because our product categories are very different from that of Vietnam’s, so Vietnam has basically been the gainer,” Huq said, explaining the negative growth.
Government policy that maintains a relatively strong taka currency is another factor, she said.
“Therefore, we have very, very humbly suggested to the government that other policy measures should be taken to support the sector,” she said.
Negative growth
The RMG sector is the most dynamic in Bangladesh’s economy. Exports of ready-made garments soared to $34.1 billion in 2018-19 after nearly tripling over a 10-year period, accounting for 84 percent of Bangladesh’s total export volume of $40.5 billion that year, BGMEA statistics show.
This year, from July through November, RMG exports shrank by 7.74 percent, dropping to U.S. $13.08 billion compared with $14.1 billion during the same period last year.
“There has been consistently negative growth of over 7.5 percent in the last five months,” Huq said.
In April, Huq, 55, became the first woman appointed as president of the BGMEA, whose member factories mostly employ women, who have long complained about low wages and long working hours, among other conditions in the workplace.
Before taking on her new role, Huq served as managing director and chairwoman of the Mohammadi Group, one of Bangladesh’s largest companies, which owns garment factories nationwide.
Apart from aiming to diversify its RMG products, Bangladesh needs to diversify the skills of the garment trade’s workforce and make the sector more efficient, Huq said.
This can be done, for example, by training and redeploying workers for other roles as the industry adjusts to automation through new technologies, where one machine can do the work of seven people, she suggested.
“In general, with new industries coming up, we should be finding more areas where we will be able to diversify into. So sector diversification is also important, re-skilling of the workers is extremely important,” Huq said.
In the interview at her Dhaka office earlier this week, Huq indicated that worker salaries remain “an issue” because manufacturers aren’t receiving a high enough price for their products.
“The worker’s salary has been always an issue, even with the minimum wage increase – which is many fold – that we have done so far,” she said.
“There’s a lot of discussion about living wage, fair wage, but the question is, do we get fair prices? Fault also lies with us because we are never that equipped to negotiate with our buyers,” she said.
A garment worker who spoke to BenarNews earlier this year described how, after seven years on the job, she could not afford to keep her son with her in Dhaka despite working up to 14 hours a day.
Moreover, after a recent wage increase of about $30 a month, Shipa Akhter said she felt pressured to work longer hours.
“A huge workload follows this slight wage increase. When I got 6,800 takas [$80.5] per month, the workload was manageable. Now, I have to think twice even going to the toilet, lest I lose my job,” she said.