Opportunity lost: The impact of long lockdown on the RMG sector

Prior to the recent lockdown which started from 23 July, 2021 in Bangladesh, the RMG sector was recovering from the year and half long pandemic very rapidly and triumphing in many areas. 

As the pandemic started in early 2020, the world's retail market was completely shut and Bangladesh's RMG sector was totally decimated to a point where many predicted that a comeback would not be possible. 

But with the help and vision of the Prime Minister Sheikh Hasina and strong resolve of the people, Bangladesh's RMG sector was on a strong rebound. 

After a small pause at the beginning of the Covid-19 pandemic in April-May 2020, Bangladeshi garment industries were able to operate successfully in the middle of this pandemic for the last 14 months with less than 1% infection among the workers due to strict maintenance of health and safety protocols and discipline. 

The RMG sector has also accomplished and made significant progress over the last few years such as improved workers' health, work safety and compliance, sustainable manufacturing and green revolution, and increased the contribution towards the country's economy by increasing export revenues every year. 

Our progress and development have been recognised internationally and received worldwide appreciation.

The QIMA (Hong Kong based Quality Control Supply Chain Audits) in their Q2 barometer report of 2020 has ranked Bangladesh second in ethical manufacturing. 

Some of the key parameters for this recognition include hygiene, health and safety, waste management, child and young labour, labour practices, including forced labour, worker representation, disciplinary practices and discrimination, and working hours and wages.  

All these are extremely important measures, and the entire RMG Sector and the nation was very proud of these accomplishments. 

BGMEA in a press conference shared the excellent achievement in ethical manufacturing, but was humble and clearly expressed the need to hold on to the current accomplishments and make continuous improvements in all of these categories. 

In the environmental sustainability front, Bangladeshi garment factories are in the leading position in the world in terms of green industrialisation. 

Bangladesh has the highest number of green factories with 143 factories LEED certified by the USGBC, of which 41 are Platinum and 89 Gold rated. 

Besides, 500 more garment factories are in the process of being LEED certified. 

As recognition of the sector's hard and relentless pursuit, USGBC has just bestowed the BGMEA with the '2021 leadership award'. 

BGMEA has also joined UNFCCC, the German Green Button initiative, and a circular fashion project with GFA to attain environmental sustainability at the industry level.

Overall, the brand value of 'Made in Bangladesh' was on the rise, and Bangladesh was perfectly positioned to grow the global RMG Market share.  

On top of attaining safety and sustainability standards, Bangladesh was able to gain trust and reliability in the mind-set of global brands and retailers as a country of destination where products can be manufactured without disruption. 

With less than 1% impacted Covid-19 cases in the RMG sector and with strict discipline and safety protocol in place, the Bangladesh government let the garment industries continue to operate their manufacturing activities for the past 14 months. 

This is at a time when India's garment operation got disrupted heavily due to rampant spread of the Delta variant of Covid-19, as well as the political disruption in Myanmar garment production. 

With its strength and capabilities for reliable deliveries, Bangladesh became the preferred destination for fast and reliable sourcing of RMG as the demand in the western world was rising at a rapid pace. 

Due to mass vaccination success in the USA and Europe, both of the regions were opening up and people started to come out and shop for new clothes. 

This was a sweet surprise for lots of retailers and brands as they did not expect such a strong demand so quickly. 

Since all the retailers were conservative in their inventory planning for the spring and summer 2021 seasons, there was a shortage of goods in the stores. 

The Bangladeshi RMG industries being open and with available capacities started receiving lots of 'chase' or 'spot orders' – RMG market terms which mean refilling of known orders with additional order quantities. 

Hence Bangladesh saw increased export volumes in May and June compared to 2020 (Covid) and 2019 (pre-Covid). 

Retailers and buyers also started to plan for bigger volumes of orders for their holiday season (November-January in the western world) seeing a steady jump in retail sales in the western markets. 

Just between May and June, the USA retail sales in clothing grew 2.6% and it has been growing steadily. 

RMG factories including woven, knit, and sweater factories, which are at the moment producing for the western 'holiday season', received a larger volume of business than 2020 and similar in volume to pre-Covid times. 

When the holiday season order just started to ship the bulk of which have already been produced, the long unplanned lockdown jolted the garment industry. 

There was no pre-announcement where RMG industries could make a backup plan and also there were no prior indications or data which showed that the garments industry has caused the increased rate of infection of Covid-19 in Bangladesh. 

On the contrary, being disciplined and organised, the industry infection rate was minimal to meniscal. 

Therefore, what prompted the government for the long shutdown and made the RMG industry a part of the shutdown will remain a mystery to many financial, medical, and RMG industry experts.

Before the long lockdown from 23 July a very bold and aggressive vaccination programme was successfully launched in the garment sector. 

On 18 July, with the help of the health services in Gazipur, CARE Bangladesh, and selected trained RMG factory medical and HR staff, three large RMG factories with almost 12,000 RMG workers were successfully vaccinated in Gazipur using spot registration based on employee IDs and National IDs. The very next day another 17,000 RMG workers were vaccinated successfully using the same mechanism. 

The government has been very supportive in providing the RMG factories the necessary vaccines, but the stock of available vaccines is the key issue in mass vaccinating the entire RMG sector. 

Given the success of vaccination in the factories, and the success in the general Covid-19 vaccination programmes, and process with app and web-based registration and certification, we believe that Bangladesh is capable of successfully vaccinating the population if sufficient vaccines are available. 

Instead of a long lockdown, all efforts should have been taken for mass vaccinating the garment workers of the country given the vaccines are becoming available and more and more vaccines are arriving every day. 

Given the advanced compliance and safety expertise of the RMG sector and along with the help of the local government health authorities, vaccination should have been the route chosen to combat Covid-19 spread in the country rather than shutting down RMG factories for a long period of time. 

The trust and reliability of deliveries earned by sustaining manufacturing activities in the middle of the pandemic for the last 14 months will erode from the mind of the buyers due to this sudden change in the policy of enforcing lockdown in the RMG sector which contributes to 84% of Bangladesh's total export. 

This is a big blow to the RMG sector which was recovering from a six billion dollar deficit in export in 2019-2020 and would have gained a few billion dollars of additional export in 2020-2021 despite Covid-19. 

This could have been great for the industry and the economy of the country as well as the livelihoods of millions of people who directly and indirectly depend on the garment sector.

But all is still not lost if the RMG factories are opened up in a phased manner, as it was done in 2020, without any further delay starting from 1 June. 

The RMG sector of this country has shown the determination to rise up to any challenges, and I am sure it can do the same this time as well and it has been able to operate the industries with tremendous discipline and strong Covid-19 protocol. 

This strong maintenance of protocol should be combined with a mass vaccination programme at the factories with the target to vaccinate all the RMG workers, about 4.4 million people, by September 2021. 

This will send a strong message to the world and regain the confidence of the buyers. 

Mass vaccination of the RMG workers is the only reliable way to keep the continuous uninterrupted operation of the factories which is key for the manufacturing sector and livelihoods of millions of people who are part of the sector. 

The lockdown combined with Eid holidays, which lasts for almost 19 days and will shave off almost one to three billion dollars of export from the RMG sector of the country, is not sustainable. 

This calls for a new way of thinking where vaccination should be at the forefront. 

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions and views of The Business Standard.