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VIDEO: COVID-19 Costs Bangladesh Factories $10B, BGMEA Pres Says

Garment factories, while they supply the goods that make the fashion industry what it is, have often been left for last in a low-margin business that has long held low-cost as its highest standard.

And never has that been more evident than in the midst of the COVID-19 pandemic—particularly in Bangladesh, the world’s second-largest supplier of clothing.

In recent weeks, brands and retailers have bailed out on their order commitments, cancelling or postponing upward of $3 billion dollars’ worth of goods in the country, causing a chaotic trickle-down effect for the workers who won’t get paid if their factories don’t because orders aren’t being shipped.

And the financial liability alone extends even beyond the value of cancelled orders.

“We also have a cumulative liability of the unfinished goods, so the liability is probably going to be running up to almost $10 billion,” Dr. Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told Sourcing Journal in the first installation of its ‘On the Groundvideo series, which will bring often unheard voices in the supply chain to the fore.

The coronavirus is already having an outsize impact on the world, and its ramifications will leave lasting effects on fashion. In Bangladesh, it’s going to be an “uphill battle” from here, said Huq, who feels the industry shouldn’t be pitting its own plight against that of the factory worker.

“I think it’s a different reality for people in the West because you are being given bailout packages by the government, the government is looking after businesses, so I don’t think it’s very wise of us to assume that they’re in a worse position, because most of their conversations are starting from a loss of profit and here it’s probably a loss of breath,” Huq said from her home in Bangladesh during an interview she agreed to do at 2:00 a.m., visibly fatigued from the toll this ongoing battle is taking on the industry she represents.

“There’s a straight disconnect between your world and ours,” she said.