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Bangladesh Garment Sector Still Not Out of the Woods, Experts Say

As the Covid-19 pandemic continues to grip the globe and throttle supply chains, garment workers in Bangladesh are still bearing the brunt of an industry-wide slowdown that has left thousands struggling to find work and floundering on the brink of destitution.

More than 70,000 people are estimated to have been laid off after predominantly Western brand and retailers suspended or rescinded $3.1 billion worth of clothing orders and recent rebounds in textile exports have not been able to make up for the anticipated $5 billion in fiscal-year losses, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the country’s largest trade group of garment factory owners.

Though factory chiefs say 90 percent of canceled orders have been reinstated, and production lines are hiring again, labor advocates say demand for jobs far surpass supply, leaving jobless garment workers with few alternatives or assistance. Workers have had to leave the manufacturing center of Dhaka and return to their villages, where they rely on food handouts from local charities.

“For every 10 workers who lost their jobs, only one is being hired,” Kalpona Akter, founder of the Bangladesh Centre for Worker Solidarity, told the Thomson Reuters Foundation Friday. “This is putting the lives of thousands of workers and their families at risk, because they haven’t earned for the last three to four months.”

Though the industry exhibited recent signs of recovery—Export Promotion Bureau data showed Monday that shipments of ready-made clothing topped $8.13 billion from July to September—factory owners say orders are still down by two-thirds and brands are demanding discounts of 20 percent to 25 percent for previous orders.

“The turnaround hasn’t been significant,” said Mohammad Hatem, vice-president of the Bangladesh Knitwear Manufacturers and Exporters Association, which represents about 800 factories, told the Thomson Reuters Foundation. “We thought we would get a good number of orders before Christmas, but that hasn’t happened.”

Even in the first 25 days of September, prices have declined by 5.29 percent compared to the same time last year, Rubana Huq, president of the BGMEA, told Sourcing Journal. “All these would not certainly leave the factories in a better position to do good for [their] workers,” she said, though she called 70,000 workers “not a significant part” of the total workforce. While Huq does not expect the employment situation to get worse, since exports are leveling off from its prior nosedive, she would like to see greater emphasis given to “sourcing, pricing, payment and bankruptcy protection” to better prop up factories and those they hire.

Indeed, a study published last week by Brac University’s Centre for Entrepreneurship Development, the James P. Grant School of Public Health and the Subir and Malini Chowdhury Center for Bangladesh Studies at the University of California, Berkeley, found that 82 percent of the 1,057 Bangladeshi garment workers it surveyed earned less in April and May compared with February because of Covid-19’s economic fallout and a nationwide lockdown that saw workers earning—at most—65 percent of their established wages. Some 52 percent of respondents said they saved less in April and May compared with February; 77 percent said it was difficult feeding everyone in their household. Three in five workers said they were likely or very likely to get infected by the virus at their workplaces and 29 percent said they would probably contract it from their homes.

As of Monday, Bangladesh has reported more than 370,000 confirmed cases of Covid-19 and at least 5,300 deaths.

Huq says the industry needs to take a holistic view about worker concerns. “We should not also deny the fact that the factories were completely left abandoned that time by the buyers,” she said. “With no payments coming for the goods that were already shipped, with confirmed orders in different stages being stranded for several months, probably the steps taken were the best we could do to save the workers and the industry.”

“We are extremely grateful to [the] Honorable Prime Minister of Bangladesh for the great support provided to the industry through wage support loan and working capital loan which ultimately helped the industry pay the workers and keep the businesses going,” she added, referring to the Bangladeshi government’s regular disbursements to export-related industries to help pay wages and its 1-trillion-taka ($11.8 billion) nationwide stimulus package.

The authors of the Brac University report wrote that the existing sector may need an overhaul. Bangladeshi garment workers, in order to be treated with dignity, they said, need a system where they have a “safety net, adequate wages and job security.

“These are all necessary for workers’ livelihoods during normal times, but even more critical during times of extreme economic crisis and hardship, like under this current pandemic,” the authors said. “Otherwise, as we see, it is very difficult to mitigate a crisis by living hand to mouth (with inadequate nutritional intake), reducing other potential critical expenses and exhausting limited savings. All these actions have placed workers in an extremely unhealthy and vulnerable situation. We need to have a continued discussion around the adequacy of current wages.”

The garment sector, which employs 4.1 million workers and is the second-largest exporter of clothing after China, generated $34.1 billion or 84 percent of the Bangladesh’s overall exports in the fiscal year through June 2019.

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