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Leading Bangladeshi Politican Warns RMG Factories Against Worker Layoffs

A leading Bangladeshi politician is urging garment factory owners not to shed staff despite the sharp downfall in orders due to the COVID-19 pandemic.

“The workers brought profits to you in good times. Don’t lay off workers in these days of crisis,” Obaidul Quader, minister of road transport and bridges and general secretary of political party Awami League, said in an online press briefing Monday. “The retrenchment decision will provoke dissatisfaction as it will be like pouring water on a drowned mouse.”

Quader’s declaration follows last week’s announcement that Bangladesh’s garment sector is staring down $5 billion in “irrecoverable losses,” according to Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the country’s largest trade group for factory owners. Because of evaporating work orders, factories are running at 55 percent capacity, she said, adding that “it will not be possible to engage all the workers.”

Huq’s remarks came under fire after the Bangladesh Confederation of Labour and other trade unions took issue with what they described as an “irresponsible” attitude over prospective layoffs.

In a response Saturday, the BGMEA said the “news was not presented correctly [and the] BGMEA, as an organization, has no scope to make such an announcement.”

Still, Quader appealed to members of the BGMEA to be compassionate.

“Do not consider it from the business point of view,” he said. “I request you do not fire the helpless [ready-made garment] workers, and be sympathetic towards them.”

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The second-largest exporter of clothing after China, Bangladesh’s garment sector employs roughly 4 million people and accounts for 84 percent of the country’s export revenue. At least 1 million garment workers have already been laid off or furloughed because of canceled or suspended orders from Western brands, according to the Center for Global Workers’ Rights at Penn State University.

Bangladesh’s Department of Inspection of Factories and Establishments has tabled the loss of 18,000 garment manufacturing jobs, but workers’ rights groups say the number is closer to 70,000 and will progressively climb as the crisis endures.

Of BGMEA-affiliated garment factories, 1,926 have come back online; 346, the trade group says, have been shuttered in the past two months.

“Even the larger factories are not able to use more than 80 percent of their capacity,” a spokesperson said in a media statement. “If the situation continues, rest of the factories will either shut down one by one or work at low capacity.” The BGMEA said it expects both factory owners and workers to “respect the labor law” if layoffs do occur.

According to BGMEA data, the sector has seen a 14 percent decline in growth in the first 10 months of the current fiscal year—July 2019 to April 2020—which it described as the “most negative growth figure” for the industry in the past five years.

The numbers worsened from May 1-20, when the garment industry recorded a massive 55.7 percent falloff in growth.

To date, brands and retailers have canceled more than $3 billion in orders—the equivalent of 982 million garments, the BGMEA has said.

Compounding the problem is the fact that sourcing executives are planning steep cuts in sourcing volumes, according to management consultant McKinsey & Company. The impact will be felt hardest in the second quarter of 2020, when two-thirds of fashion-sourcing executives expect to pare volumes by at least 20 percent.

In addition, a recent McKinsey Global Fashion Index review estimated revenues for the apparel and footwear sectors to shrink by 27 percent to 30 percent in 2020, with “even deeper declines in some sub-sectors and geographies.”

Overall, nearly 36 million people have lost their jobs since Bangladesh initiated its country-wide lockdown on March 26, according to Abul Barkat, president of the Bangladesh Economic Association.

During this period, 59.5 million people moved into a different class bracket, with 25.5 million becoming “extremely poor,” he said in an online press conference Monday. The most acute job losses were in the service, agriculture and industry sectors.