Myriad workers stare as RMG minors getting upset

Umpteen workers stare at possible livelihood upset as Bangladesh's readymade-garment factories -- mostly small and midsize ones -- may take a stumbling blow from the highhanded latest US tariff regime.
Though big factories mostly manufacture garments for US buyers, industry-insiders say, SMEs that dependent on the US market would face a 'disaster' and those working for other traditional destinations, like EU, and non-traditional markets would indirectly be affected in the long run.
According to them, some 3,500 garment factories are in operation across the country -- majority being SMEs in size.
Garment factories having workers more than 1,000 are categorised as large and units with workers ranging from 300 to below 1,000 defined as medium and up to 300 as small ones.
According to Mapped in Bangladesh (MiB), some 1,734 factories export readymade garments to the United States and some 1,100 units that have workers below 1,000 are small and medium while the rest 634 have workers above 1,000 to 18,500.
Out of the 634 factories, 314 have workers up to 2,000 while the rest have workers ranging from 2,001 to 18,500, MiB data showed.
Talking to The Financial Express, Fazlul Hoque, former president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said the impact would be "disastrous" for SMEs that solely depend on the US market.
"They can't switch over to other markets overnight while banks are unlikely to support them for three to four months," he said, on a note of concern that many of them might face closure.
An Ashulia-based factory owner says it largely manufacture apparel for its US buyers and recently there is a shortage of work orders as buyers have halted placing fresh orders as they can't negotiate price due to uncertainty over tariffs.
The factory talked to a number of big units that also work for US retailers, and according to the factory owners, big suppliers are also facing suspension of a certain volume of orders, resulting in a certain portion of production line lying idle.
"This would become usual for other small and medium units when markets go down. Big factories that do large volume would grab the larger share of work orders and SMEs, in the long run, would suffer," Md Shehab Udduza Chowdhury, says vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
The SMEs have been facing a number of challenges, including high compliance requirements that need to maintain equal standards like the big ones, while they are deprived of getting necessary banking facilities with high bank interest rates, he mentions.
"They also face high charges compared to the large factories in time of opening letter of credits," he says, adding that SMEs who are mostly dependent on the US market might face closure as they would face break-neck competition both in and outside the country.
There would be tough competition in EU markets, too, as all might rush to the destination due to the high tariffs, price pressure and uncertainty, another exporter predicts.
Former president of BGMEA Rubana Huq fears the impact of the additive tariffs will be disastrous for Bangladesh.
One might assume that only 30 per cent of the total US exports will be affected, but in reality, it is the potential of export to the US, Bangladesh's fastest growing market that will be dampened.
She adds one ought to think about thousands of workers who will be affected for lack of employment as many factories will shut down.
"A careful analysis between the domestic and export scenario must be carefully weighed in before negotiating with the US," she told the FE, adding that there are barely any other products that can hit the export market overnight and there are barely any other markets that they can diversify into.
The efficiency level at this point is at an optimum and the industry can't turn to maximum automation because of its impact on employment and margins are at a bare minimum disallowing any substantial trimming of expenses.
The government needs to consider whether it is ready to sacrifice a growing market or carefully navigate through this phase, she said, adding: "We are risking massive unemployment and closure of businesses."
Fazlee Shamim Ehsan, executive president of BKMEA, however, opines that it is not wise to comment until the tariffs are fixed for China and India.
Vietnam might be the biggest beneficiary if tariff is considered, he says, adding that Bangladesh would be in an advantageous position due to its capacity, quality and price.
"But price pressure would be the challenge for Bangladesh as retail sales in US might decline due to high tariffs and buyers would put further pressure of price squeeze," he says, adding that all local exporters should have addressed the issue jointly by following a minimum price benchmark.
Kalpona Akhter, executive director at Bangladesh Centre for Workers Solidarity (BCWS), thinks the recent US tariff decision threatens to erode Bangladesh's competitiveness on the global apparel market, putting millions of workers, especially women, at risk of losing their livelihoods.
The US tariff decision may push some businesses to cut corners such as slashing wages, ignoring safety, or outsourcing to unregulated subcontractors, she fears, saying that "without urgent action, we risk a surge in unethical practices that will hurt workers most."
The government must urgently engage with the US administration and collaborate with industry stakeholders to protect jobs and ensure export sector remains resilient.

Munni_fe@yahoo.com