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RMG, textile owners seek stimulus again to pay wages, bonuses

  • Published at 04:41 pm April 26th, 2021
RMG-Zakir
Syed Zakir Hossain/Dhaka Tribune

BGMEA, BTMA, BKMEA jointly sent a letter to the finance minister in this regard

Apparel and textile factory owners are once again requesting for more stimulus from the government to pay their workers' wages and Eid bonus.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the Bangladesh Textile Mills Association (BTMA), and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) jointly sent a letter to the finance minister on April 24, where they said they were unable to tackle the financial onslaught brought about by the second wave of the Covid-19 pandemic.

Garments and textiles owners have requested the government to offer loans on similar terms as last year to help the export-oriented readymade garment (RMG) sector to pay wages, Eid bonuses, and other allowances to their workers for April, May, and June.

BGMEA President Faruque Hassan, BTMA President Mohammad Ali Khokon and BKMEA President AKM Selim Osman MP signed the letter. 

Moreover, copies of the letter were also sent to the chief secretary of the prime minister's office, senior secretary of the finance department, and the governor of Bangladesh Bank.

The letter claims that back-to-back lockdowns in a number of countries due to the second wave of the pandemic have caused buyers to renege on their contracts and not pay for already-shipped goods.

In such a situation, there is a lot of pressure on the apparel factory owners to pay wages and bonuses to the workers before Eid, the letter also said.

Due to the cancellation and suspension of orders and delayed payments, the local apparel sector is now in a dire situation and it has become difficult to arrange for funds to pay workers' wages and bonuses before Eid, the letter also said.

In such a situation, in order to support the export-oriented garment industry, it is necessary to give loans on easy terms like last year to pay wages, allowances, and bonuses to the workers for the months of April, May, and June, said the letter.

Asked about the letter, BGMEA Senior Vice-President SM Mannan (Kochi) confirmed the matter and said that due to the second wave of Covid-19, many buyers are not paying for the exported clothing on time.

“Our exports have somehow come to a standstill due to the second wave. In addition, there are still payments pending from many buyers. The market was turning around after the first wave, but during the second wave, there is a deadlock situation in the market as before,” he added.

“At this stage, we are not getting payments of our previous shipments. Ready products are not being shipped. Again, at the same time, we have to pay wages, bonuses, and other allowances for the upcoming two Eid. So, we have no choice but to apply for a new stimulus. We have requested the government for the repayable loan on the same terms as last year,” said SM Mannan.

Last year, most of the purchase orders were canceled and suspended during March. 

Then the government announced a loan of Tk10,500 crore from the promotional package announced by the government to pay the workers' wages for April to July. 

The service charge against this loan was 2%.

Although the package was announced for the workers and employees of export-oriented industries, most of the 1,800 factory owners have taken loans from the fund. The grace period of this loan was six months. The next 18 months were to repay the loan.

However, late last year, BGMEA and BKMEA demanded an extension of the grace period for incentive loans, which the government later granted.

In the last week of February this year, the Finance Ministry directed the governor of Bangladesh Bank to give an additional six months from March 1 to repay the loans taken from the incentive fund. 

As a result, the owners will have to pay the loan installments from next September.