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  HOME | Business & Economy (Click here for more)

Bangladesh’s Apparel Sector on Verge of Collapse due to Coronavirus Crisis



DHAKA – On March 26, when Bangladesh enforced its lockdown to stop the spread of coronavirus, Ranu Akter, a garment factory worker, was called by her employer and asked to resign.

“I saw five to six other workers like me waiting in the office room. We were all asked to sign a plain paper and leave the factory,” Ranu, 20, told EFE.

She received her March salary on April 20 but no assurance if she would be able to get her job back at the Global Merchant garment factory.

Masuda Akter Koli, 30, is also looking at an uncertain future.

“My husband is also now out of work due to coronavirus. We have a five-member family to support. We don’t know how we will do it now,” said Koli who worked at Interfab Shirts.

In early April, when the factory shut down, she found a notice on its gate saying workers who had been working for less than a year should not return when it reopens.

The notice has disappeared, but Koli’s job worries remain.

Millions of textile workers in Bangladesh are staring at layoffs as the pandemic has wreaked havoc on the global economy and brought supply chains to an almost grinding halt.

The lockdown has paralyzed Bangladesh’s crucial textile sector, which contributed nearly 84 percent of the country’s total exports in 2018-19 when it shipped products worth $34 billion.

As global demand for clothing, like all other non-essential products, has dried up, big fashion brands face accusations that they are ditching those who toil for them.

Trade leaders say thousands of workers have already lost their jobs due to the crisis.

Joly Talukder, general secretary at the Garment Workers’ Trade Union Center, said the 55 factories they monitor have retrenched around 25,000 permanent workers since March.

“We are afraid the situation is much graver. If we add the temporary workers or the workers who joined the job recently, we will see (that) nearly 40,000 workers have been sacked from these factories alone,” she said.

Labor rights activist Kalpona Akter said workers bore the brunt of the crisis as the “irresponsible behavior of owners and buyers” was pushing them to starvation.

“If this pandemic goes on for a few more months, buyers and owners will lose (…) a fraction of profit. But the workers will lose their livelihood,” said Akhter, executive director of the Bangladesh Center for Worker Solidarity.

However, Rubana Huq, the president of Bangladesh Garment Manufacturers and Exporters Association, argued that the consequences of the pandemic were no less grave for owners.

“As per the latest report, we have 1,149 factories reporting 981 million pieces worth $3.17 billion in export canceled or held up, affecting 2.27 million workers approximately. If we consider the factories that have not reported, the figures may reach a few folds higher,” she told EFE.

“Estimated bank liabilities of this industry currently stand at $1.96 billion, which have been incurred to procure raw materials for the confirmed orders that have been canceled recently.”

Huq said they were also experiencing delays in getting payments for shipped goods from buyers.

She said most of the buyers have deviated from the original sales contracts and were demanding a 20-50 percent discount. The average value addition in the industry is around 25 percent.

Prime Minister Sheikh Hasina announced on March 25 a $588 million stimulus package to pay the wages of the workers that came in the form of a bank loan at two percent interest, payable in 24 months.

Huq said there had not been much support from fashion brands as they were trying to avoid losses and had “distanced” themselves from suppliers “with exceptions of a few.”

More than half of the 316 Bangladesh suppliers surveyed by Penn State University’s Center for Global Workers’ Rights in March have had the bulk of their in-process, or already completed, production canceled since the pandemic.

The survey found that 72.1 percent of buyers have refused to pay for raw materials already purchased by suppliers, and 91.3 percent of buyers refused to pay for the cut-make-trim costs of suppliers.

At least a dozen multinationals, however, have honored their commitments to Bangladeshi manufacturers and workers despite the impact of the coronavirus pandemic, according to Worker Rights Consortium (WRC).

EFE confirmed that with some of the companies such as the Spanish Inditex, the Swedish H&M, and the British Marks and Spencer.

H&M spokesperson Katarina Hugo said they have honored their commitments “by taking delivery of already produced garments as well as goods in production if delivered within a reasonable time-frame.”

Inditex, the owner of Zara, said they were committed to supporting manufacturers and workers during the pandemic.

“We are fulfilling all our responsibilities to our suppliers by ensuring that all orders that have been produced or are currently in production are completely paid for according to the original payment terms,” a spokesperson for the Spanish company said.

 

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