Says Commerce Minister Tipu Munshiat the inauguration of the BGMEA's “Go Human, Go Green” initiative
The government would consider a fresh round of stimulus plan for the apparel sector if the second wave of coronavirus cases threatens to leave the industry reeling, said Commerce Minister Tipu Munshi on Saturday.
Soon after coronavirus began to sweep across the Western world in March, the government, anticipating a cash crunch among the exporters for the flurry of order cancellations and delayed payment, announced a Tk 5,000 crore stimulus package to enable them to pay their workers’ wages.
The amount, which was in the form of low-cost loans, was extended twice to stand at Tk 10,500 crore.
The apparel sector turned around to a great extent from the pandemic fallout due to the stimulus package offered by the government, Munshi said at the inauguration of the “Go Human, Go Green” initiative of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
“But now, we are fearing and feeling the impact of a second wave of coronavirus. So, a stimulus package like the previous one might be considered for the garment sector.”
As per the terms of the stimulus package, garment exporters could take loans at 4.5 per cent interest, with the government chipping in with the remaining 4.5 per cent interest that the banks charge for loans. The amount must be returned in two years after a grace period of six months.
Disbursement from the package began in April, with the amount initially used to pay the wages and allowances of workers for three months. Then in July, the government allowed the exporters to avail low-cost loans to pay the salaries for that month.
Then last week, the BGMEA sought another round of rescue package along with longer duration to repay the first round of loans.
“If the situation deteriorates due to the second wave of the pandemic, we would consider offering another stimulus package for the garment industry. We have to protect the apparel trade and it is for the country’s economy,” said Munshi, also a former president of the BGMEA.
In the first five months of fiscal 2020-21, garment exports brought home about $12.8 billion, down 1.5 per cent year-on-year, according to data from the Export Promotion Bureau.
Last month, apparel shipment fetched $2.4 billion, which is about 4 per cent less than a year earlier.
The garment makers’ demand for a second stimulus package has been forwarded to the finance ministry.
“We asked the finance ministry to take a positive stance,” he said, adding that the BGMEA’s request for an extension to the repayment tenure of the package is under discussion.
The apparel sector successfully came out from the severe crisis faced during the March-April period, said BGMEA President Rubana Huq.
“But we cannot ignore the ongoing second wave of covid-19,” she said, adding that the BGMEA has taken steps to face it effectively.
One such step is the “Go Human, Go Green” for the wellbeing of the workers as well as for enhancing the apparel sector’s productivity.
A total of 70 workers would be studying at the Asian University for Women under a special programme.
“Those days are not so far when the apparel workers will work at the managerial level in different organisations,” she added.
The other pledges include a pledge for workers’ children’s education, health and mental health.
“In the context of the pandemic, health and mental health issues became more prominent and crucial for the workers. Considering the importance of workers' wellbeing, we have partnered with MonerBondhu, a platform to provide care for mental health and well-being service.”
The pledge for promoting Bangladeshi culture and heritage to global fashion brands would help the country march forward and establish a strong foothold in the apparel trade.
The pledges for sustainability, productivity and innovation will allow the sector people to be familiar with the latest innovation, technology, software and trends.
In addition, it will help the garment makers to improve their unit’s productivity through skills training.
Beyond this, sustainability will focus on the Fourth Industrial Revolution (4IR) and its role in the transformation of the sector, Huq added.
About 53 lakh professionals will be displaced from jobs due to the 4IR, said Cabinet Secretary KhandkerAnwarul Islam.
“With our education system and skill, we would not be able to face 4IR. I am more worried about the 4IR than the pandemic,” he added.