Economy
12 days ago

Labour unrest inflicts $400m loss on main export industry

Sector now stable after a challenging period: BGMEA

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) held a press conference at the trade body's headquarters at Uttara in the city on Saturday.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) held a press conference at the trade body's headquarters at Uttara in the city on Saturday.

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Bangladesh's export-earning apparel industry suffered production loss worth US$400 million for labour unrest for over a month since end of August, on the cusp of a regime change.

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) came up Saturday with the claim of cost of industrial action and sought preventive actions against any recurrence of violence so they can make a rebound.       

The association said the apparel industry was now stable after a challenging period and called on the government to take necessary measures to ensure law and order in the sector to help them sustain trade competitiveness and drive further growth.

"The BGMEA board has been able to deal with a disastrous situation with the cooperation from the government, owners, workers, Bangladesh Army and law-enforcing agencies," association president Khandoker Rafiqul Islam told journalists.

"Some of the buyers have shifted work orders from Bangladesh to other competitive countries for the unrest. We are expecting that they (buyers) will come back here as normalcy is restored in the sector," Mr Islam said at a press conference held at the trade body's headquarters in Uttara in the city.

The BGMEA president, however, also claims that the clothing industry has faced a production loss of US$400 million due to the recent labour unrest starting from the end of August and having continued more than a month until the first week of October.

Some 39 affected factories were unable to pay wages for September because of the labour unrest, leading the BGMEA to request interest-free bank loans on easy terms from the government to support them.

The apparel apex body urges the government to maintain a stable law- and-order situation in the sector and also calls for simplification and acceleration of customs and port procedures, particularly to avoid unnecessary delays in loading and unloading goods at Chattogram seaport. "It's a recurrent issue."

The association leader also requested the government not to disconnect utility services such as gas and electricity for next three months in any industry, saying that many factories have been affected by the labour unrest.

Expressing concerns over ongoing banking-sector reforms, he urged the government to ensure that these changes should not negatively impact production and commercial activities within the industry.

Mr Islam proposed the formation of a dedicated taskforce, including representatives from the National Board of Revenue and Bangladesh Bank, to develop business-friendly policies in line with the sector's needs.

The trade body also made an urgent appeal for gas supply through cylinders from CNG stations to be permitted, enabling factories to maintain normal production amid the current energy shortages.

It also calls for stronger measures to develop an external-interference- free disposal system of jhut and other recyclable waste materials to help in enabling factories to manage waste disposal efficiently and sustainably.

The BGMEA further demands of the government not to reduce the cash-incentive rate for the RMG sector following LDC graduation set for 2026.

In response to the significant toll the industry has suffered from prolonged labour unrest, the association seeks stringent measures against those undermining the sector, underscoring the necessity of strict laws and appropriate punishments to prevent future disruptions.

"The government should introduce a safe-exit policy for entrepreneurs in the RMG sector," the BGMEA chief said, adding that a significant number of factories have been struggling to sustain their business in the wake of various adversities.

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