The statement by Mosharraf Hussain, managing director of the Standard Group, that he plans to rebuild its gutted factory at Gazipur so that the company, which is a respected supplier to leading RMG retailers such as Gap and Zara, can rise from the ashes, is an inspiring one.
For the company’s thousands of workers, reports that the company has swiftly been able to secure $50m funding towards its rehabilitation via a five-year-loan rescheduling, comes as good news.
The Bangladesh Bank has rightly acted quickly to help the company.
We recognise that other RMG factory owners also have pressing financing needs. There is a strong case for similar policy measures to alleviate the pressure on factory owners and workers, caused by the ongoing political turmoil.
Presently around 40% of garment production is hampered due to shortage of raw materials. Blockades and hartals have also hugely diminished the ability to ship finished goods outside of the country. BGMEA has appealed to the Bangladesh Bank for interest waivers on existing loans until the end of the current political turmoil. Many individual factory owners have been also trying to reschedule their loan payments.
While it is ultimately up to individual commercial banks to grant any such arrangements, the urgency of the circumstances suggests the central bank should undertake special measures on a wider scale. The Bangladesh Bank should consider further similar special initiatives to help the garment sector weather the current storm.
