The decision to keep the garments factories operational during the current lockdown has been a very tough and bold move by the government, given the global competitive environment within which the garments sector of Bangladesh operates.
Compared to the exports of 2019, the RMG exports have gone down by more than 20-25% in 2020 and the trend is very much downwards for 2021 as well.
The retail sectors and stores for which the garments are made from Bangladesh remain closed during the significant portion of 2020-2021 around the globe, although there is a huge surge in online sales, which made it possible for the retails and brands to survive somehow. But at the same time many giant retail brands went bankrupt, such as JC Penny, Debenhams, G-Star and many more.
Due to bankruptcy, canceled and reduced orders, the RMG factories of Bangladesh also operated at 70-80% of the capacity in 2020 compared to 2019. The operational RMG factories and exports helped to reduce negative impacts of Covid-19 on Bangladeshi economy.
All these were possible due to the courage and decisive move of the Honorable Prime Minister of Bangladesh Sheikh Hasina to keep the garments factories open after the initial lockdown in April, 2020, and to give the RMG sector the oxygen and life support in the form of financial loans or incentives for salaries and working capital.
Without this support, the RMG sector would have perished or suffered a tremendous setback. Even after all the policy support received, hundreds of factories ceased operation and a few hundred thousand people lost jobs.
The impact of Covid-19 on Bangladesh's RMG sector workers were minimal or negligible during the period from May 2020 (when the factories opened) to March 2021.
According to a study conducted by Dr Saxena, the executive director of 'Center for Bangladesh Studies' at the University of California, Berkeley, and BRAC University, only approximately 0.40 % of workers were impacted by Covid-19, with the death rate directly from Covid-19 being non-deterministic.
This is due to the demographics and younger age of the workers which is on average 24.5 years and the active lifestyles of the workers. Average workers walk almost 4.8km, a day that includes their commute to and from work as well as activities in the factories. Another reason for the low infection rate is that the garments workers don't mix with too many new people, as many do in market places and public transportation.
According to the data provided by Asian Center for Development, about 90% RMG workers live within 1.5KM of their workplace and it takes them around 19 minutes of commute time. Also, according to Berkley-BRAC joint study about the Health and safety protocols, which was jointly developed by BGMEA, BetterWorks of International Labor Organization (ILO), and Department of Inspection for Factories and Establishments (DIFE), protective measure have been adopted by all RMG factories of Bangladesh.
According to the study, 87% of the respondents said their factory has introduced precautions including distributing protective equipment (91%), encouraging more hygiene measures (77%), sending workers with symptoms home (66%), and encouraging physical distancing between workers (75%).
By any standard, this is an extremely positive statistic, which came directly from a survey of workers conducted by an independent body of a reputed research Institute.
Due to the strict measures of the garment factories and discipline maintained in the factories, the transmission rate of Covid-19 was minimised, which is less than 0.40% during the operational period of garment factories for the last 12 months. These data and facts were few of the deterministic factors which favoured the option of keeping the garment factories open during the week-long lockdown that has started from April 14, 2021.
Due to the unprecedented efforts by various countries and international bodies, vaccination globally is progressing at a very rapid pace. In the USA more that 56% of the population irrespective of age has received one or more vaccine doses.
Similar statistics also exist in the UK as well. The high vaccination percentage is helping these countries reach herd immunity and both the USA and UK are beginning 'phased openings' of their countries.
By June/ July both the USA and the UK may fully open up without restrictions. This is extremely encouraging as the retail stores are opening up. The demand for garments is growing and the demand is expected to gradually reach pre-Covid stage of 2019 level within the period of December 2021 to April/May 2022.
Due to good spring season in both the USA and the UK, and less inventory and garments stocked by the retailers in the west, the manufacturers of Bangladesh are seeing a sudden spike in RMG orders in April.
These are called chase orders for the spring-summer 2020 season, which have to be shipped out from Bangladesh by the end of May or first week of June. So, if there is any shutdown/lockdown of factories, these orders will be moved to competing manufacturing countries like India, Vietnam, Cambodia, Indonesia and China since the factories of those competing countries are operating at full speed.
So, to remain competitive and to eliminate any uncertainties of our western buyers, it was crucial for Bangladesh's RMG factories to stay open and make sure that shipment on time (SOT) is maintained.
Any lockdown will send a panic wave to western retailers and buyers. The impact on the new orders along with the current chase orders would have been severe if lockdown had been implemented for the RMG sector.
Any disruption of operation will have an immediate and long-term impact on the RMG sector which is estimated to be USD $3-$5 billion. All garments factories big and small would be impacted and it would be extremely difficult, if not impossible, for this sector to recover from the debacle of another lockdown.
Based on past statistics regarding Covid-19 infections among RMG workers, the strong immunity system and low average age of the workers, as well as not using public transportation due to proximity of factories to the homes of the workers, the policy makers of the government has taken the bold and magnanimous decision of keeping the RMG factories open, which was welcomed by the RMG manufacturers and workers.
In case of any lockdown, massive transit of the workers to their home villages and return from their homes could not have prevented the Covid-19 spread, no matter how strictly preventive measures were taken by the law enforcement authorities.
This mass movement of 5 million RMG workers would have only contributed to a higher rate of transmission of Covid-19 instead of reducing it – the exact opposite impact of lockdown the policy makers are aiming for.
Also, by keeping the factories operational at the time when the western market demand for garments is going up would help the Bangladeshi manufacturers keep the new and future garments orders in Bangladesh and not let it drift to competing countries. The decision of keeping garment factories out of the lockdown will contribute to saving the RMG sector of Bangladesh.
In the moment of this severe crisis, the calculative risk taken by the Honorable PM and government policy makers should be applauded and honoured by the garments manufacturers and workers by following all health and safety protocols in the strictest way possible.
Time and time again, the RMG sector of Bangladesh has proved its determination and strength through tremendous resilience, discipline and unity. The country is counting on the RMG Sector owners and workers to show their mettle, responsibility and accountability once again.
Shovon Islam (Shawn) is the CEO and Managing Director, Sparrow Group of Industries. He was Ex Functional Architect of Hewlett-Packard and Vice President of Microsoft and a regular contributor of TBS, and can be reached at [email protected].