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COVID-19 Continues to Rattle Global RMG Sector, Even Where Factories Reopen

Chaos continues to roil the global readymade garment industry, even as factories in certain countries are slowly coming back online despite the worsening coronavirus pandemic.

Garment workers in Bangladesh are continuing to protest for unpaid wages even as they return to work amid the continued nationwide lockdown, which has been extended to May 16 after the South Asian nation saw its highest single-day total of 665 new cases of COVID-19 infections on Sunday.

Some 2,000 workers from MHC Apparels in the Sreepur municipality of Gazipur remained seated at their workstations from “morning to afternoon” over the weekend as they demanded their salaries from the past three months, according to the Dhaka Tribune.

On Monday, garment workers flocked into the streets of Savar, just outside the capital city of Dhaka, expressing their abject distress at the significant loss of income.

“We are not getting wages for the last three months,” Abdur Rahim, a textile worker, told Reuters. “We are literally starving,”

The Bangladesh government has announced a $590 million aid package for exports-oriented factories to pay their workers, but garment manufacturers say the funds are not enough to ease their bottom lines as canceled and suspended orders lurch past $3 billion, according to the Bangladesh Garment Manufacturers and Exporters Association.

Already, nearly 2,200 clothing factories have applied for bank credits worth nearly 31.5 billion taka ($370 million) from bailout funds to pay workers, the Financial Express reported.

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The number of confirmed cases now exceeds 10,000, the health ministry said, with an official death toll of 182, though some experts say the real numbers could be much higher in a country of more than 160 million due to a lack of testing and spotty access to an already overburdened healthcare system.

But Rubana Huq, president of BGMEA, says there’s a “genuine misunderstanding” of the coronavirus crisis in Bangladesh.

“The cases are not that bad anymore; it’s not even going up to the point that we would go up,” she said in a video interview with Al-Jazeera on Monday. “I think what matters to us most is keeping the economy alive and rolling with the maximum safety guidelines in place.”

The BGMEA says it has formed six committees to ensure member factories pass health and safety muster as the pandemic deepens. A spokesman told the news agency Bangladesh Sangbad Sangstha last week that it has inspected 147 factories to date and found 144 “satisfactory.”

“The other three need improvements in terms of density,” he said. The factories have been advised to implement immediate corrective actions before they can resume operations.

A total of 1,061 factories, out of BGMEA’s 2,274 members, are now back in business, the spokesman added.

Despite evaporating orders from Western retailers, the economic pressure to reopen factories is clear: Bangladesh’s $30 billion clothing sector employs 4 million people and accounts for 80 percent of the country’s export earnings.

In an April survey of 159 garment workers by Brac University’s James P. Grant School of Public Health in Dhaka, 47 percent said they were not receiving wages and felt uncertain about their employment status. Only one-quarter of respondents were on paid leave.

“Respondents reported the need for immediate cash and food support,” Dr. Atonu Rabbani, associate professor of economics at the University of Dhaka and senior research fellow at Brac University, said in a statement.

With concerted government and corporate intervention, garment workers are forced to choose between disease and starvation. The Dhaka Tribune reported Tuesday, for instance, that eight garment workers in Savar tested positive for the novel coronavirus following another seven on Friday.

Health Minister Zahid Maleque has said, however, that factories that have resumed production will be shut down if a “significant number” of their workers are infected with the coronavirus, though he did not clarify what the number would be in a recent press briefing.

The sourcing locales of Bangladesh, Cambodia and Haiti face challenges from the coronavirus, even where garment factories have re-opened.
Garment workers are seen leaving the factory after their shift. This is the scenario after factories reopen during the nationwide lockdown that was imposed by the government in attempt to reduce the spread of COVID-19 coronavirus pandemic in Dhaka, Bangladesh. Zabed Hasnain Chowdhury (Anando)/Shutterstock

“COVID-19 has pushed the BGMEA into a difficult position to decide whether or not to close the factories,” Shahidur Rahman, a professor of sociology in the department of economics and social sciences at Brac University, wrote in an op-ed in the Dhaka Tribune Tuesday. “On one hand, there has been a pressure from the suppliers to keep the factories open for the sake of survival of the business. On the other hand, trade unions and activists from around the world are worried of the lives of the garment workers and expect to close down the factories.”

But Bangladesh isn’t the only garment-producing country to reopen. Factories in Haiti, too, have thrown back their shutters after a four-week closure to blunt the spread of the contagion. Like their counterparts in Asia, Haitian workers have not received the wages they were promised, according to the Solidarity Center. Workers who were paid received only two weeks’ wages a month late, causing “extreme hardship” in a country where garment workers’ daily minimum wage is less than one-quarter of the estimated cost of living, the labor rights group said.

Factories in Haiti are required to operate at 30 percent capacity, with most workers scheduled for three days, a move that has them living on at least half of their usual salary. At least one factory—S&H Global at Caracol Industrial Park—is requiring workers to sign a document stating that they will take precautionary measures, such as wearing face masks and taking their temperatures, while at work, and agreeing that they are legally responsible for their illness if they fall sick.

In Haiti, the poorest country in the western hemisphere, the garment industry makes up between 80 percent and 90 percent of the country’s exports, which totaled $1.6 billion in 2018, according to the World Bank.

In Cambodia, factories remained closed, though not out of choice. At least 180 garment factories—with 60 more “in the pipeline, according to the Garment Manufacturers Association in Cambodia (GMAC)—have applied for suspension because of cancelled orders from Western brands, affecting 150,000 workers.

“This will impact not only the workers but also the 2 million Cambodian family members who depend on them,” the GMAC wrote in an open letter Tuesday.

“Cambodian manufacturers are already suffering from many cancellations and no new orders and cannot withstand any payment default,” the letter said. “Payment terms can be discussed but no payment is not acceptable and we therefore appeal to your sense of decency to make good on your debt.”

Fears of social unrest abound as the country’s economic growth is predicted to fall from an annual 7 percent to 2.5 percent this year by the World Bank and minus 1.7 percent by the International Monetary Fund.

The government is also expected to lose millions in subsidies to unemployed or furloughed workers, even after slashing its partial payment to a much smaller sum than previously promised.

“The problem is when people are out of a job and hungry, the crime rate may surge as people resort to robberies and all that unfortunately may create another layer of social unrest,” David Van, a senior associate at Platform Impact, a public-private partnership, told the Khmer Times on Monday.

Heng Sour, a spokesman for Cambodia’s labor ministry, said last week that he expects a 50 percent to 60 percent decline in garment, footwear, and travel goods exports for the second quarter of this year compared with 2019.

“Cambodia has yet to receive any orders from buyers for both May and June, as well as for the foreseeable future,” he said. “We can conclude that exports of garments and footwear will be hit hard in the second quarter this year.”

With 750,000 workers, the garment industry is Cambodia’s largest employer and contributes 40 percent of its gross domestic product. The nation exported $9.3 billion in clothing and footwear last year, according to the Ministry of Industry and Handicraft, a year-on-year increase of 11 percent.