It was a year of trepidation and angst. Having cancellations of orders worth $3.18 billion and waking up to daily nightmares of discounts, deferment of shipment and payments, and endless discussions had become a part of our routine.
As much as the brands had suffered, we had suffered more. The 4.1 million people engaged in the sector faced uncertainty. Entrepreneurs who had built their factories with the hope of expansion and future growth faced a dark forest of the unknown.
Eventually, when the brands had considered reinstating orders and when 90% of the orders were reinstated, we still had to face the back-to-back liabilities of $1.96 billion, which remain unpaid because of either non-payment by buyers or for their bankruptcies.
This year, the growth of RMG from January to November stands at 17.64%. Despite the growth in August and September, the second wave has pushed the sector back by multiple folds now.
The export growth remained negative in November and December. While November had -2.66% growth, it was -5.64% for the first 20 days in December.
The challenges that we face today are the uncertainties over the placement of orders from the buyers' end, the challenges of obtaining working capital for the SMEs, the bankruptcies of brands and a lack of protection at our end, and the deferred payments and discounts.
Challenges also include the dip in the consumer index this year. In Europe, consumption had dropped by 13% while it was 16% in the USA in November. We suffered a dip of 5.19% in the price.
Had the prime minister not announced the stimulus packages in March, the majority of the factories would have faced closure. Had the bureaucrats not supported the private sector, we would have been in dire straits.
At this point in time, we need a fresh wage support package for four months starting from January 2021 at a 2% service charge. This should also include a 60-month payback period with a moratorium of 12 months.
At the same time, an extension of the current package tenure for five years and an extension of the moratorium for up to 12 months would be of immense help for the sector.
This temporary assistance will help the sector go to the next level as we do foresee ourselves excelling by June. By contrast, our other competitors, including Ethiopia with its political instability, Cambodia with its loss of GSP and Vietnam with its limited production capacity, will not be in a better position.
So, temporary support will revive the industry and take it to a far superior platform, which would help us with a thrust of product diversification, recycling and value addition. Also, it will help us prepare for the fourth industrial revolution and in the process, our workforce will be prepared with better skills.
Rubana Huq, president of BGMEA