The readymade garments industry of Bangladesh – challenges and solutions post-COVID-19

The readymade garments in Bangladesh are the second largest after China and it alone contributes 20% of the country’s GDP.

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readymade garments industry Bangladesh

Covid-19 has taken a toll of 220 in Bangladesh and infected over 14,000 people. The world is ought to change post-COVID-19. However, the readymade garments industry (RMG) of Bangladesh which exported $34 billion worth in 2019 faces serious challenges. Due to the worldwide lockdown of shopping centers, Bangladesh is undoubtedly the worst hit due to this fallen industry since readymade garments contribute to about 80% of their total export and this has incurred a loss of $ 6 billion to their exchequer. The readymade garments in Bangladesh are the second largest after China and it alone contributes 20% of the country’s GDP. According to the Asian Development Bank (ADB), Covid-19 will add more than 13 million people to the existing 34 million people below the poverty line. Readymade garments in Bangladesh, being labor-intensive, the impact of Covid-19 will be more evident. Around half of the 4000 garments factories in Bangladesh have opened on a limited scale last week. This calls for a concerted effort by the government, Readymade garments industries, Readymade garments-associations, financial institutions, NGOs to come forward and work to mitigate the impact of Covid-19 and additionally prepare it for future-ready.

Country’s largest Readymade garments body, the ‘Bangladesh Garment Manufacturers and Exporters Association’ has issued guidelines to factory employers encouraging them to adhere to safety measures and prevent the spread of Covid-19 upon factory re-openings. The government should strictly follow strict international guidelines like enforcing social distancing, daily sanitizations of warehouses and factories, install wall-mounted IR thermometers, provide masks, hands-free sanitizers and washbasin,  keep an on-site team of emergency doctors and an ambulance, prep up a vigilance team that closely monitors the employee’s travel and family history on a day-to-day basis, and so on. These measures increase the cost to the company therefore industries must have to come with some innovative ideas or ’Jugaad’ to save monetary burden on factories.

Another immediate measure, the government should undertake is offering an economic stimulus package especially for the Readymade garments industry. ADB has lent around $ 3 billion separate from $100 million to support the public health requirements to combat Covid-19. Many factory workers demanded to clear the previous salaries. Salaries should be directly transferred to their account. The announcement made by  Prime Minister, Sheikh Hasina, to allocate $ 5.8 billion for export-oriented industries is one right step towards clearing the impending wages at a 2% interest rate. Similarly, an appeal made by the Commerce Minister, Tipu Munshi, to not fire any factory worker is a relief but not enough to the stressed workers which had no option but to leave the factory towns! If the market demand does not resume, factory owners will have few choices left! To tackle this problem permanently, the government should plan the decentralization of the garment manufacturing process.  

Most of the Readymade garments companies of Bangladesh cater to the US and European markets. Sometimes they sub-contract these orders to small venders. Post-COVID-19 is probably also a time to engage in and develop micro-scale industries at the individual tailoring/stitching unit at the sewing machine level in addition to the sub-contractors. These units situated at workers’ residence connected via mobile and road for easy information and goods flow, will work as co-operatives. Amul co-operative is the biggest successful example of co-operatives! Design development, order acquisition from big buyers, raw material procurement, and branding are a few money and high-skilled process but the later sewing processes are labor-centric and require limited specialized skill. Decentralization will have its own cost benefits – the big garment manufacturing houses will lessen its electricity burden, save on space and property rental, machine maintenance costs, etc. For example, an industrial sewing machine that costs about Tk 18,000 could easily be financed without collaterals by microfinance organizations in which Bangladesh microfinance organizations are efficient. These independent micro-sewing hubs will not just speed up and support the industrial process upon market demands but also increase entrepreneurship among workers beyond the Covid-19 period. 

More than 80% of the workforce at the Readymade garments industry in Bangladesh comprise of women who are vulnerable to workplace exploitation. Decentralization of the garment manufacturing process would not only give more financial and personal security to women but allow them to save commute time if they work from home. Another benefit of decentralization is that big factories will be free from noose of labor law which is a major hurdle in labor-intensive industries. 

Readymade garments industry occasionally face industrial accidents and fires. Decentralization at a micro-sewing level will also decrease casualties due to safety-related issues like fire, smoke, etc. High-safety measures further help in improving ranks in the Generalized System of Preferences and other safety indices help to build clean cloth image.

Readymade garments industry could take this opportunity to diversify their domain for sustainability. One such measure could be a diversion of garments industry resources to PPE kit manufacturing hub post-COVID-19. China provides the majority of raw materials to Bangladesh’s RMG industry, even for PPE. China has embarrassed itself with its export of poor quality PPE.   Bangladesh can rise to this occasion though competing with China in manufacturing and marketing is no easy task!

The very limited use of artificial intelligence (AI) by the Bangladesh Readymade garments industry is another point of concern. Many online retailers use an App-based virtual fitting room. This technology works on 3D body measurement that uses AI in conjugation with computer-vision technology for a body scan and deep learning algorithms to analyze images and take precise body measurements. These technologies could be used by factories or online tailor-fit retailers via Apps to take the order of custom-fit or made-to-measure clothing and deliver customized clothes to customers that could be another side of the globe.

Automation is ever-changing the labor-intensive businesses and as a venture capitalist, John Chambers reiterated, ‘40% of businesses will not exist in a meaningful way in the next 10 years’. Post-COVID-19 is a watershed moment for Bangladesh’s RMG to embrace a sustainable change or perish!

Related: International clothing brand ‘Forever 21’ going to close in these countries

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