Globally, since March 2020, economic activity has been halted due to Covid-19, putting the entire world under great uncertainty.
The global economy could suffer losses between $5.8 trillion to $8.8 trillion -- equivalent to 6.4% to 9.7% of global GDP -- as reported by ADB. The outbreak-affected economy will witness a decline in global employment between 158 million to 242 million jobs, where 70% of total employment losses will be in Asia and the Pacific.
In an analysis, the International Labour Organization (ILO) warns that, only for this devastating pandemic, billions of labourers are at major risk of losing jobs around the world. In the US alone, more than 4 million workers filed for the jobless benefit in May.
In Bangladesh, the RMG sector is the biggest foreign currency generating sector that provides direct employment to around 4.4 million people, the majority of whom are women. Covid-19 has created a noxious situation in this sector. Already, 1 million workers have become unemployed due to this pandemic.
A report published by Penn State University’s Centre for Global Workers’ Rights and the Worker Rights Consortium (WRC) noted that more than 1 million garment workers in Bangladesh have already been fired or furloughed, as a result of order cancellations and unwillingness of Western buyers to compensate for abrupt cancellations.
The garment factories surveyed mentioned that 98% of their buyers refused to contribute to the cost of paying partial wages to furloughed workers, required by law, and 72% of furloughed workers were sent home without any compensation or payment. Meanwhile, 97% of buyers refused to contribute to the severance payment expenses of dismissed workers, also a legal entitlement in Bangladesh.
The situation worsens when recognized Western clothing brands like JCPenney, Debenhams, Aldo, and Forever 21 announced themselves as bankrupt immediately after the sudden shock of Covid-19, leaving a great uncertain future for the workers. They are giant buyers of Bangladeshi RMG products.
In a note, the Bangladesh Garment Manufacturers and Exporters Association says that 1,150 factories in Bangladesh had lost orders worth $3.18bn due to the drastic effect of the pandemic.
A photo has been published in a local newspaper that depicted Mostafiz Uddin, globally acknowledged as Denim Mostafiz, who is the managing director and CEO of Denim Expert Ltd, cried when he heard that his western buyers refused to pay a single penny for pre-ordering of clothes which his factory workers already prepared. In this situation, Mostafiz got stuck in a helpless condition, assuming massive risk about the future job certainty of 2,000 workers working in Denim Expert.
A fundamental question arises in the minds of readers about the rights of garment workers. Those poor people, whose only source of income is earning from the RMG sector, what will they do? The stimulus package given by our government has helped the export-oriented industries a lot but considering the rampant impact of this pandemic, who else out there will compensate for such a big loss?
All concerned are emphasizing more on increasing funding in the health sector as Covid-19 is the most serious health crisis the world has ever experienced in a century. But, apart from the intent of increasing and strengthening health spending, protection schemes in income and livelihood are also needed for tackling prolonged economic recovery, especially in Bangladesh.
Being out of work will also have an impact on the mental health of these jobless workers. Unexpected unemployment not only puts impact on income, savings, and spending but also on social status, dignity, and family relationships.
Needless to say, our government should take a diplomatic stance in front of international organizations to protect the subsistence of momentous wheels of our economy, our garment workers to ensure they wouldn’t be the worst sufferers of this pandemic effect.
This sudden unemployment crisis has created a risk factor for millions of workers in Bangladesh. Our government needs to make sure that certain rules regarding exporting are appropriately implemented in the future. Moreover, a responsibility lies from the side of the ILO to put pressure on giant companies so that they can make themselves aware of their business ethics and corporate good practices.
Recognized humanitarian rights organizations should come forward to support this export-oriented sector that is constantly fulfilling the needs of the fashion industry across the globe.
Arunima Dutta Tushi is an MBA student from the University of Chittagong and Assistant Executive, Business Analysis Department, BSRM.
