• Wednesday, Feb 08, 2023
  • Last Update : 10:24 am

CPD: Govt's stimulus package hardly benefits RMG workers

  • Published at 05:11 pm June 9th, 2020
Syed Zakir Hossain/Dhaka Tribune

The impact in terms of stimulating economic revitalization of the readymade garment (RMG) sector was rather limited

The Centre for Policy Dialogue (CPD) on Tuesday said that the government's stimulus package for export-oriented sectors hardly benefitted the country's apparel workers, as there were irregularities in wage payment and retrenchment.

The impact in terms of stimulating economic revitalization of the readymade garment (RMG) sector was rather limited, it also said.

The CPD made the observations in its assessment titled “Early Assessment of Tk5,000 Crore Incentive Package: Will the Target Groups Get the Benefits?” through a virtual briefing on the day.

On 25 March, the government launched the Tk5,000 crore stimulus package for export-oriented industries to pay workers' wages for three months (April-June) with only 2% as service fee.

“Three core objectives, including revitalizing domestic economic activities, ensuring employment of workers, and maintaining competitiveness of the entrepreneurs using the stimulus package, will hardly be achieved through the Tk5,000 crore emergency support for the export-oriented industries,” said CPD research director Khondaker Golam Moazzem in his keynote presentation.

Despite the credit support, workers’ employment could not be ensured. Rather there were incidences of retrenchment in the RMG sector, he added.

According to Department of Inspection of Factories and Establishments (DIFE) data, in the last two months about 18,000 apparel workers were fired.  

On the other hand, the impact in terms of stimulating economic revitalization of the RMG sector is rather limited.  

As per the early assessment findings, 85.5% of total interviewed workers reported that they received full payment for March.

In April, only 14.8% of respondents reported receiving full payment, while about 27.3% received 50% or less of their gross wages.

Among the rest of the workers, 60.7% workers received payment that was 60% to 95% of their gross wages while for other workers, payment varied from no payment to token payment to half payment.

As of 11 May, a total of 2,132 garment factories from BGMEA and BKMEA applied for Tk3,343 crore loan from the package.

The stimulus packages for export-oriented industries extended some support to the enterprises with a view to improve their competitiveness. However, maintaining competitiveness will call for positive response from the brands and buyers in the form of placement of orders over the coming months, the CPD also observed.

Does the package revitalize economic activities?

Raising private consumption through workers’ wages could not be ensured due to irregularities in wage payment, said CPD.  

Workers need regular payment of their wages; otherwise, it is difficult to ensure food security and minimum livelihood standards. To this end, public monitoring agencies should strictly monitor the payment of workers' wages on a regular basis, it added.

As per the findings, 63% of respondent workers mentioned that they could not pay house rent, 39% mentioned unpaid utility bills, and 36% mentioned unpaid school fees.

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