Shoring up the RMG sector
Monday, 2 November 2009
Only a short interval after the ugly incidents in some readymade garments (RMG) industries at Ashulia, fresh violence erupted in a garments factor at Tongi last Saturday. The incidents at Tongi were very serious, to say the least. Two persons allegedly died from police firing there and about two hundreds were reported to have been injured in different ways. Thus, there is no way to brush it aside as a minor happening.
There are conflicting explanations about why or how the violence was triggered. According to a section of workers, the non-payment of salaries or arrears were the root causes. The owner of the factory stated that they were quite up-to-date in their payments until September. They had notified the workers duly about paying their October salaries on the 10th of November and temporarily declared the factory shut or laid off until that period. According to the management of the factory, their backs had reached the wall from drying up of orders from buyers and they had to resort to this step from desperation. Home Minister Shahara Khatun also supported this claim by the factory's management about being reasonably up-to-date in paying salaries and other dues to workers. Furthermore, the association of RMG industries, BGMEA, had similar things to say.
Only thorough and further investigations will reveal beyond any doubt the actual reasons for last Sunday's fury of the workers at Tongi or the objectivity of their claims. Meanwhile, the latest RMG industry-centred violence should serve as an eye opener for the relevant government authorities to be more up and doing to really effectively address the problems faced by this sector. Bangladesh Garments Manufacturers Exporters Association (BGMEA) has been consistently cautioning all about the bad times gripping the sector. The member-units of the BGMEA, as their association considers, cannot overcome the problems entirely on their own although industry operators have been claiming that they are doing their contingency planning and cost cutting to keep their nose above the water. Many of them have reportedly been sustaining losses in the backdrop of the recession in major buying countries but they are still producing and exporting while bearing the losses. On its part, the BGMEA has also underscored several times during the last couple of months about their conditions and how government's further delay in aiding this sector would only worsen their situation.
Packaged assistance programmes were given to minor export-oriented sectors to remain competitive eight months ago in February last. But no worthwhile assistance was announced to the RMG sector at that time which fetches over 70 per cent of the export earnings. No specific assistance has so far been given to the RMG sector, notwithstanding pleadings for the same from BGMEA. The BGMEA President had feared about the shut-down of a good number of industries, if the badly needed supports from the government did not come in time. A number of garments industries, particularly those doing the sub-contracting job, have reportedly been closed over the last couple of months and more seem to be headed in that direction.
Rival countries of Bangladesh in the RMG trade such as India, Pakistan and Vietnam declared packaged assistance programmes for their RMG sector last year. They have also added to them recently. Thus, these countries increased their competitiveness specially in relation to Bangladesh. But the Bangladesh RMG industries suffered reverses, particularly in terms of prices, in trying to face up to the uneven competition and to keep themselves somehow afloat. Besides, the government in Bangladesh is also yet to act upon its earlier promise, made at the suggestion from the BGMEA, to set up a special squad of the police to protect the garments industry against vandalism on the plea of savings cost - a penny wise and pound foolish policy really. It is high time for the government to be doing its best to squarely address the challenges facing the garments sector. And the sooner, the better.
There are conflicting explanations about why or how the violence was triggered. According to a section of workers, the non-payment of salaries or arrears were the root causes. The owner of the factory stated that they were quite up-to-date in their payments until September. They had notified the workers duly about paying their October salaries on the 10th of November and temporarily declared the factory shut or laid off until that period. According to the management of the factory, their backs had reached the wall from drying up of orders from buyers and they had to resort to this step from desperation. Home Minister Shahara Khatun also supported this claim by the factory's management about being reasonably up-to-date in paying salaries and other dues to workers. Furthermore, the association of RMG industries, BGMEA, had similar things to say.
Only thorough and further investigations will reveal beyond any doubt the actual reasons for last Sunday's fury of the workers at Tongi or the objectivity of their claims. Meanwhile, the latest RMG industry-centred violence should serve as an eye opener for the relevant government authorities to be more up and doing to really effectively address the problems faced by this sector. Bangladesh Garments Manufacturers Exporters Association (BGMEA) has been consistently cautioning all about the bad times gripping the sector. The member-units of the BGMEA, as their association considers, cannot overcome the problems entirely on their own although industry operators have been claiming that they are doing their contingency planning and cost cutting to keep their nose above the water. Many of them have reportedly been sustaining losses in the backdrop of the recession in major buying countries but they are still producing and exporting while bearing the losses. On its part, the BGMEA has also underscored several times during the last couple of months about their conditions and how government's further delay in aiding this sector would only worsen their situation.
Packaged assistance programmes were given to minor export-oriented sectors to remain competitive eight months ago in February last. But no worthwhile assistance was announced to the RMG sector at that time which fetches over 70 per cent of the export earnings. No specific assistance has so far been given to the RMG sector, notwithstanding pleadings for the same from BGMEA. The BGMEA President had feared about the shut-down of a good number of industries, if the badly needed supports from the government did not come in time. A number of garments industries, particularly those doing the sub-contracting job, have reportedly been closed over the last couple of months and more seem to be headed in that direction.
Rival countries of Bangladesh in the RMG trade such as India, Pakistan and Vietnam declared packaged assistance programmes for their RMG sector last year. They have also added to them recently. Thus, these countries increased their competitiveness specially in relation to Bangladesh. But the Bangladesh RMG industries suffered reverses, particularly in terms of prices, in trying to face up to the uneven competition and to keep themselves somehow afloat. Besides, the government in Bangladesh is also yet to act upon its earlier promise, made at the suggestion from the BGMEA, to set up a special squad of the police to protect the garments industry against vandalism on the plea of savings cost - a penny wise and pound foolish policy really. It is high time for the government to be doing its best to squarely address the challenges facing the garments sector. And the sooner, the better.