Why RMG factories were kept open during lockdown

Bangladesh's export-oriented readymade garment (RMG) factory owners and industry insiders said that there was no alternative to keeping the sector operational amid the countrywide lockdown, to keep the economy alive.

Touted as the lifeline of the country's economy, the apparel sector contributes 83% of the total exports from Bangladesh, but has also sustained stumbling blocks thanks to the Covid-19 pandemic.

The decision to keep factories operation was inevitable as the sector suffered the most during the countrywide shutdown during the first wave of the pandemic last year, shooting export earnings down to its lowest in its three-decade history.

According to Export Promotion Bureau (EPB) data, RMG exports plunged by more than 20-25% in 2020 compared to 2019, and the trend is very much downwards for 2021 as well.

Sources also said that the move is in line with keeping up with work orders. 

Also the decision to keep factories open was controversial, considering the rapid increase in Covid-19 infection rates, but they welcomed the decision to keep factories open.

Faruque Hassan, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said that the apparel industries of competitor countries like India and Vietnam are also functioning.

“I spoke to officials from India and other countries. Their industries are operational. If we closed the factories, we risk losing work orders, which is crucial to getting our economy back on track,” he also said.

Hassan also said that the last year was a nightmare for the RMG industry. 

Hence, there was no alternative to keeping the industry open. But they are complying with the health directives set by the government, and are also maintaining liaison with labour leaders to motivate the workers amid such troubled times.

Vidiya Amrit Khan, director of BGMEA, and deputy managing director of Desh Garments Ltd, said that there is more than just one factor behind keeping factories open. 

The condition of the buyers is not good during the pandemic as well. They either cancelled or reduced their demands as they were forced to shut stores due to Covid-19.

“If one of our shipments is cancelled or delayed, it will be very difficult for us to get a new order. Buyers are also looking for a chance to cancel orders. If we close the sector now, they will get the scope to cancel their orders,” Vidiya said.

She also said that the order cancellation not only affects the revenue stream, but also puts a negative impact on loan repayments. 

"It will not also be good for the banks either. If there is no income, how can we repay loans?

Again, we have to think about our workers. A number of women and men make their living by working in the sector. So, if the factories closed year after year, what would happen to the workers? We have to think about everything. Therefore, it is crucial to keep the factories open,” Vidiya added.

Anwar-Ul-Alam Chowdhury Parvez, former BGMEA president and president of Bangladesh Chamber of Industries (BCI), said that despite the risk posed to workers, the total infection rate among RMG workers has been 0.4% of the total infection rate.

"For workers' wellbeing, as well as for the sake of the economy, apparel factories must remain open," he also said.

“Many countries in the world haven’t gone into lockdown. If we keep our factories closed in this situation, the orders will go to our competitors. Moreover, there is no way for the workers to earn their livelihoods if the factories are closed. Halting production is not the answer,” he added.

The government can be strict to ensure hygiene norms everywhere, said apparel industry insiders.

Monitoring should be strengthened on whether health directives are followed in the factories or not. If the RMG industry is operational, there will be no need for any financial incentive package, they stressed. 

Bangladesh will be a role model in the world if the government can use the experience of last year to tackle the pandemic, they added.