Garment factories, it seems, are rehiring the workers laid off earlier in the year in the face of order cancellations by Western buyers juts as the coronavirus was taking root all over the world.
Employment in the factories is close to scaling back to pre-pandemic times, according to a study by the South Asian Network on Economic Modeling (Sanem) and Microfinance Opportunities (MFO) -- in what can be viewed as a promising development for the sector that employs more than 4 million, most females, and brings in the lion’s share of export earnings.
In April, employment in the apparel sector fell to 49%. But in September, it stood at 90 per cent of what it was before coronavirus arrived on these shores, according to the study.
“This is due to a rise in work orders by foreign buyers,” said Selim Raihan, executive director of Sanem.
After hitting a 40-year-low in April, exports picked up from May and is now performing as well as in 2019. For instance, garment shipments brought home $2.4 billion in September, up 4.3% year-on-year, according to data from the Export Promotion Bureau.
Although there is an improvement in jobs, it is very crucial to retain jobs and take measures to protect them from the second wave of the pandemic, Raihan said at a webinar styled “What’s Going On? Lessons from the Garment Worker Diaries: Covid Context” on Saturday, where the findings of the study were shared.
The pick up in employment also enhanced food security, which increased from 3% in April to 54% in September, the study found.
The rise in exports, which eventually increased the working hours in June-July, is due to the shipment of the un-exported orders of previous months, said Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association.
Between June and September, apparel items worth $10.3 billion were shipped, in contrast to $10.4 billion a year earlier.
However, the future does not look as rosy given the emerging second wave of coronavirus cases in much of the Western world.
“That would determine the employment situation in the sector,” Huq added.
Many workers suffered layoffs, as a result of which workload on the existing workers shot up, said Kalpona Akter, executive director of the Bangladesh Centre for Workers' Solidarity.
Given the second wave in the importing countries, the livelihood of the garment workers will be heavily affected.
Hence, it was urgent to develop a backup plan for the garment sector to safeguard workers from the severity of the second wave, she added.
“Bangladesh needs to devise its own policy considering its unique need, to retain jobs in the garment sector,” said Tuomo Poutiainen, country director of the International Labour Organisation.
The pandemic has been disastrous for the global economy but it has also paved the way for opportunities, he said, while stressing on the importance of the quality of data during crises.
He stressed on diversification in the garment sector as well as the necessity of production of higher value products to avoid unfavourable situations.
Digital salary disbursement lost sheen
Meanwhile, one of the upshots of the pandemic, which was the shift to digital means for salary disbursement, appear to be tapering off, found the study.
The garment owners went back to their traditional method for salary disbursement soon after the government financial support weaned off its support for the sector in July.
In April, only 28 per cent of the garment workers were paid digitally, which rose to 76 per cent and 77 per cent in the following two months. In September, it stood at 60 per cent, while manual payment rose 40 per cent.
“Interestingly, women started to save money in their digital wallets, which was not seen before,” said Snigdha Ali, programme officer of Bill and Melinda Gates Foundation’s ‘Financial Services for the Poor’ Bangladesh team.
However, all these positive changes will not be sustainable without a concerted effort from every stakeholder of the industry.
She also emphasized the necessity of training on digital financial skills and awareness-building programs to make women comfortable using digital wallets.
Wage digitalization could reduce costs for a firm by around half a dollar per worker, said Mizanur Rashid, the chief commercial officer of bKash.
To facilitate the wage disbursement process, bKash also provided subsidy on charges for disbursement and withdrawal.
“But it was not a sustainable solution for the long-term.”