Timely stimulus package staved off disaster in RMG sector: Economists

The impact of Covid-19 on the readymade garments (RMG) sector of Bangladesh could have been more severe and more devastating had the timely stimulus package not been announced and had the decision to reopen the factories not been taken. 

Economists made the observation at a webinar titled, "Impact of Covid-19 on the RMG Sector of Bangladesh," which was organised by the Dhaka School of Economics (DScE). The Business Standard was the online and print media partner of the event.

At the programme, experts and industry insiders expressed hope that the RMG sector would be able to overcome the challenges posed by the novel coronavirus outbreak and return to its pre-Covid-19 growth path by the end of the current 2020-21 fiscal year. 

Dr Qazi Kholiquzzaman Ahmad, chairman of the Governing Council of DScE, chaired the event, while Mahbubur Rahman, director general-2 of the Export Promotion Bureau, was present as the guest of honor. 

The keynote paper at the webinar was presented by Ayub Ali, a senior assistant secretary of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). 

In his speech, Dr Qazi Kholiquzzaman Ahmad thanked the country's top political leadership, particularly the honorable prime minister, for taking very farsighted and timely initiatives to minimise the adverse impacts of Covid-19 in the RMG sector by providing stimulus packages and permitting the reopening of factories with proper health and safety measures.

However, Dr Ahmad emphasised the importance of proper distribution of the stimulus package so that small and medium firms also get their due shares. 

He also stressed the necessity of industry-education relationship to fill the gap of shortage of trained manpower in the sector. 

Mahbubur Rahman expected cooperation and support of business leaders to work jointly to make the sector vibrant in the days to come.

Anwar-Ul-Alam Chowdhury Parvez, president of the Bangladesh Chamber of Industries, requested the government to extend support and to continue it for another six to eight months to tackle the impacts effectively. 

Parvez, a former president of the Bangladesh Garment Manufacturers and Exporters Association, hoped that the Bangladeshi RGM sector will have a bright future if the ongoing challenge can be managed properly. 

The recent increase in exports by Bangladesh's RMG sector is mostly due to the revival of the work orders cancelled by buyers at the beginning of the Covid-19 outbreak, said Mohammad Hatem, vice president of BKMEA. 

However, he said, the RMG sector has been going through a challenging time. Garments manufacturers have been receiving work orders in recent months, but in many cases they are getting paid 10-15% lower than the pre-Covid-19 rates. 

Dr Pratima Paul Majumder, former senior research fellow at the Bangladesh Institute of Development Studies (BIDS), said the sector needed a strong buyers-exporters contract to avoid incidents like sudden cancellation of orders. 

She also said better health and safety measures are necessary to enhance workers' productivity.

Dr Anwara Begum, senior research fellow of BIDS, suggested strengthening the existing supply chain of the RMG sector.

She also suggested the need for developing measures to be able to provide new services that might be demanded by this sector in the changing global environment in coming days.