Speakers at a webinar on Saturday said the looming crisis in the RMG industry will have a multiplied chain reaction to the whole economy, and salvaging this industry will be beneficial to other sectors as well.
Bangladesh Malaysia Chamber of Commerce and Industry (BMCCI) arranged the webinar highlighting the pre-Covid-19 and post-Covid-19 scenario of the RMG industry.
It discussed the features of the current and post-pandemic circumstances of the RMG industry and its impacts on Bangladesh economy.
BMCCI President Raquib Mohammad Fakhrul said the Bangladesh economy remains highly dependent on the ready-made garments industry for creating jobs, foreign reserve, and women empowerment.
The industry contributes 11.2 percent to the gross domestic product of the country.
For instance, he said, more than 4,600 RMG factories constitute the largest industrial sector in the country and contribute to 36 percent of creating employment opportunities engaging 4.1 million workers.
Industrious, disciplined and low-cost women workers are the backbone of this industry, said the BMCCI President.
He said major global fashion brands have taken prompt responses to help flatten the Coronavirus curve and this has left significant impacts on worker employment, revenues and overall operations. Bangladesh's over dependence on apparel export might prove to be its Achilles heel.
Large-scale order cancellation and deferment are causing a liquidity crisis across the sector, prompting the BGMEA President to appeal for support, both from international buyers and the government, said the BMCCI chief.
Faisal Samad, Senior Vice President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) differentiated the pre-Covid-19 export growth vision and the actual current realty.
Subsequently, he discussed the basic issues like strides toward workers safety and wellbeing, environmental sustainability and so on under these post-Covid realities.
The BGMEA leader said the impact on the RMG industry will not be limited to itself as it might have grave repercussions on other industrial, consumer and service sectors.
The value addition in the RMG industry has increased gradually and it now stands at 63.2 percent as backward-linkage industries developed.
He said the RMG industry is a key contributor to other economic sectors, such as, banking, insurance, real estate, packaging, hotels, recycling, consumer goods, utility services and logistics.
Faisal Sanad said a World Bank survey revealed that 98 percent of RMG factories are clients of commercial banks.
All machines and plants are insured with insurance companies and, additionally, 87 percent importers and 15 percent exporters get their imports and exports insured with insurance companies.
He said it is estimated that port usage fees earned from the RMG sector account for more than 40 percent of the income of the port authority.
The 4.1 million workers in the industry have also created a large demand for low-cost consumer goods, such as cosmetics, dresses, footwear, utensils and other products, said the BGMEA leader.
Mohammad Khalil Ibrahim, Minister counsellor, High commission of Malaysia in Bangladesh, said Covid-19 has changed the purchasing habits for the world within a month in the current pandemic situation.
The effects of coronavirus across the globe remained uncontrolled and unstoppable, he said.
Due to that, Ibrahim said, the expeditious growth of internet usage has been a vital possession for all the organisations, and it has been dramatically changing the way business is being conducted. In a competitive environment, companies have to put their focus on the fast-growing trends in information technology for cost efficiency and self-survival.
He said the Malaysian government has recognized Covid-19 as an occupational disease to allow public assistance in the event of infection or worse.
He said Malaysia and the Philippines see losses of over 4.5 percent which are also of higher magnitude than in China.
Likewise, he said, the RMG industry in Bangladesh now risks losing out on orders for the entire Autumn/Winter buying season.
Nur Mohammad Amin Rasel, Senior Deputy Secretary, BGMEA presented his trade analytical paper at the webinar.
Former BMCCI President Syed Moazzam Hossain, Anwar Shahid, Vice-President, Mahbubul Alam and Hon. Secretary General, Mahbubul Alam Shah, Director, BMCCI took part in the discussion.