Garments sector deserves a more focused attention
Friday, 4 September 2009
THE garments industries operators in Bangladesh have been beseeching the government for a focused attention to their growing problems but in vain. However, it should have been the opposite as this sector is rightly considered as pivotal for the economy of the country. It accounts for about 75 per cent of the country's export earnings, being the single-biggest employer in the industrial workforce. Thus, it was earlier thought that the garments industries would get the well-deserved assistance from the government to be able to come out of the woods. But this rightful expectation of the operators of this sector was soured, to say the least, from the government's indecisive attitude.
First of all, the owners of garments industries were very disappointed in the early part of the current year when the government declared a comprehensive package of cash and other forms of assistance for different economic sectors. Prior to this, the Bangladesh Garments Manufacturers and Exporters Association (BGMEA) had lobbied the government for its inclusion as a beneficiary in this package programme. This body was also assured of a positive response to their request. But in the actual declaration of assistance, nothing was mentioned about the garments sector. Later the finance minister in what seemed like a soothing attempt stated that time was not over for extending assistance to the garments sector that kept alive hope that eventually such assistance would indeed be provided. But unfortunately this assistance has yet to come.
Meanwhile, the units in the garments sector have been fighting a grim uphill struggle against too many odds such as recession in the importing countries, shrinking orders or offers of orders at much reduced prices and fierce competition from rival countries. The playing field turned more bumpy for Bangladeshi operators of garments industries when governments in rival countries like India, Pakistan and Vietnam were quick to understand the implications of the global recession. All these countries extended packaged programmes of assistance to their garments sectors for improving competitiveness. Without getting similar assistance from their own government, Bangladeshi garments industries were, thus, much disadvantaged; they were put on the back foot in their increasingly very keen competition against the rivals.
According to media reports, some 140 garments industries of varying capacities have closed down and more are on the way. The BGMEA spokesman expressed his fears sometime ago that some 40 per cent of garments industries face the prospects of closure imminently if not bailed out by urgent governmental assistance that would help them to regain somewhat their competitiveness. The garments industries on their own have, so far, fought a losing battle to maintain production trying desperate means to cut costs and while absorbing losses. But in many cases, their backs are reaching the wall. In this backdrop, the BGMEA again issued last week what could be likened to an SOS pleading that government should no more dilly-dally but release some Taka 20 billion of cash assistance to the garments sector. It also pressed for releasing the amount of such assistance well before the coming Eid so that the garments owners are able to pacify the growingly restless workers who are demanding two months' salaries and festival bonus before the religious festival.
The onus is on the government to take the initiative before the lid is blown off. None would like to see any further deterioration of the situation in the country's ready-made garments sector. This sector has been painstakingly built up over the years as the most successful one since the independence of the country. There is too much at stake in the economic sense. There is no reason for the government to be penny wise and pound foolish by not releasing in time financial assistance to the garments sector when funds were provisioned for the purpose in the national budget.
First of all, the owners of garments industries were very disappointed in the early part of the current year when the government declared a comprehensive package of cash and other forms of assistance for different economic sectors. Prior to this, the Bangladesh Garments Manufacturers and Exporters Association (BGMEA) had lobbied the government for its inclusion as a beneficiary in this package programme. This body was also assured of a positive response to their request. But in the actual declaration of assistance, nothing was mentioned about the garments sector. Later the finance minister in what seemed like a soothing attempt stated that time was not over for extending assistance to the garments sector that kept alive hope that eventually such assistance would indeed be provided. But unfortunately this assistance has yet to come.
Meanwhile, the units in the garments sector have been fighting a grim uphill struggle against too many odds such as recession in the importing countries, shrinking orders or offers of orders at much reduced prices and fierce competition from rival countries. The playing field turned more bumpy for Bangladeshi operators of garments industries when governments in rival countries like India, Pakistan and Vietnam were quick to understand the implications of the global recession. All these countries extended packaged programmes of assistance to their garments sectors for improving competitiveness. Without getting similar assistance from their own government, Bangladeshi garments industries were, thus, much disadvantaged; they were put on the back foot in their increasingly very keen competition against the rivals.
According to media reports, some 140 garments industries of varying capacities have closed down and more are on the way. The BGMEA spokesman expressed his fears sometime ago that some 40 per cent of garments industries face the prospects of closure imminently if not bailed out by urgent governmental assistance that would help them to regain somewhat their competitiveness. The garments industries on their own have, so far, fought a losing battle to maintain production trying desperate means to cut costs and while absorbing losses. But in many cases, their backs are reaching the wall. In this backdrop, the BGMEA again issued last week what could be likened to an SOS pleading that government should no more dilly-dally but release some Taka 20 billion of cash assistance to the garments sector. It also pressed for releasing the amount of such assistance well before the coming Eid so that the garments owners are able to pacify the growingly restless workers who are demanding two months' salaries and festival bonus before the religious festival.
The onus is on the government to take the initiative before the lid is blown off. None would like to see any further deterioration of the situation in the country's ready-made garments sector. This sector has been painstakingly built up over the years as the most successful one since the independence of the country. There is too much at stake in the economic sense. There is no reason for the government to be penny wise and pound foolish by not releasing in time financial assistance to the garments sector when funds were provisioned for the purpose in the national budget.