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Bangladesh: Political Unrest Further Threatens RMG Sector

Just as Bangladesh began to see signs of repairing the tarnished image of its ready made garment (RMG) sector following the Tazreen and Rana Plaza factory tragedies, the recent bout of political unrest between rival parties has posed yet another threat to the country’s garment sector.

According to the Dhaka Tribune, Bangladesh’s garment manufacturers and exporters said Sunday that the industry is in “deep trouble” as a result of the recent turmoil.

Tensions between Bangladesh’s two major political parties, the Bangladesh National Party (BNP) and the Awami League led to a transportation blockade that has been in place since last week and is impeding imports and exports in the country.

Jan. 5 marked the one-year anniversary of the national elections in Bangladesh, which the ruling Awami League government won, but the BNP boycotted citing that they would have been rigged. Four people were killed in violence that erupted following country-wide protests, and BNP leader Khaleda Zia then called on her party members to halt road, rail and river transportation for an indefinite period.

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Atiqul Islam told a press briefing in Dhaka, “The blockade that began on January 4 has already wiped off Tk4,50 crore [$577k] of readymade garment sector,” the Dhaka Tribune reported.

The BGMEA has implored the government to leave the RMG sector out of the unrest so that the country’s major industry can operate unhindered. Though the government has been providing security escorts for moving goods on the Dhaka-Chittagong highway in order to ensure goods get moved, products traveling via alternate routes have been less secure.

“The garment industry, described as lifeline of the economy, is almost on the verge of collapse due to political instability,” the Dhaka Tribune reported Islam as saying. Buyers have reportedly already threatened to withdraw orders in light of the chaos. Garment makers, who account for 80 percent of the country’s annual imports, fear that without a prompt resolution, buyers may begin to divert their orders to other low-cost countries.

Islam noted that the industry produces roughly $55 million worth of apparel goods per day, and if the blockade hinders 50 percent of those goods, it will be a substantial loss for the sector, and a considerable setback in the country’s goal of reaching $50 billion in exports by 2021, nearly double its current exports.