Unrest hinders market dev, buyers losing confidence: BGMEA chief

Md Atiqul Islam, the newly elected president of Bangladesh Garment Manufacturers and Exporters Association, talks about the prospects and challenges of the RMG sector and the impacts of the ongoing political unrest on the industry in an interview with New Age.
He also describes what would be the role of the new leadership of BGMEA
over issues like compliance and workers’ wages. Interviewed by Moinul Haque
New Age : What is the impact of the ongoing political unrest on RMG export?
Md Atiqul Islam : The ongoing political activities, particularly hartal and other forms of strikes, are having a severe impact on the economy. They create a bad image of the country internationally and buyers lose their confidence on us.
Apart from tarnishing the country’s image, hartals also cause direct economic loss to industries. In particular, the RMG industry in the country counts between Tk 150 to Tk 200 cores of loss on each hartal day.
Our export to new markets increased encouragingly over the recent years. The political unrest is hindering the market development momentum.
New Age : What are the prospects and challenges for the sector in the coming months and what would be the role of the new leadership?
Atiqul : The prospect of the RMG industry in Bangladesh cannot be overstated. The national and international agencies and research firms like McKinsey & Co are projecting a very bright prospect for our industry. BGMEA believes the industry could reach up to $50 billion turnover by 2020, and we have the required entrepreneurial talents, a hardworking and dedicated workforce and a ready market.
Despite the entire promising outlook, there are some challenges in the national and international contexts like power and gas scarcity, lack of low-cost trade financing and inadequate infrastructure and banking regulations.
Other challenges for the industry are safe working conditions and compliance.
The issues like US GSP review and image crisis are some of the challenges in the international context.
BGMEA is always committed to fostering the growth and sustainability of the RMG industry. The new leadership in BGMEA holds that spirit and we have started working with two major visions : one is to make a compliant industry and another to ease the entire supply chain of the industry.
New Age : Are the international garment buyers serious about compliance issues and ready to pay more?
Atiqul: The perception of the entrepreneurs toward the workers and working condition has changed a lot in last few years.
The buyers are always serious about the brand value and reputation, at the same time the entrepreneurs are also more caring to the workers in today’s context.
Because the RMG industry is running with a shortage of 20 per cent skilled workers and it has become a pre-condition for the factories to maintain an acceptable standard to retain the workers.
With regards to price, the buyers are not as responsive as they are in demanding better work-place standards. However, there are some exceptions as well.
We believe Bangladesh has a huge potential to deliver a significant volume of global clothing consumption, which makes us a strategically important sourcing place and buyers would also rationalise their position.
New Age : Do you think BGMEA is doing enough so that RMG units become compliant?
Atiqul : BGMEA as the largest association representing the country’s RMG sector is doing its best to make the industry compliant. Despite limitations, we are continuing our efforts to monitor the social compliance in our factories.
Today, factories are investing more in social compliance and CSR like setting up childcare centre, health centre and schools, employing people with disability and even running old homes.
Moreover, we are vigilant to ensure the rights and welfare of our workers and their safety always.
New Age : Do you think wages of the workers should be reviewed?
Atiqul : Reviewing the minimum wages of workers is completely governed by the labour law that stipulates in which situation the wages can be reviewed.
Yes, it’s tough to live on the present minimum wages which was enhanced by 80 per cent in 2010. But we must remember the fact that in reality if we add allowances then the real take-home wage is much more than the minimum wages.
However, answering the question to the point, we must say that it is better for the industry to go for annual review of the wages to adjust inflation. This would save the industry from the burden of high wage increases suddenly; at the same the real wages of the workers would be protected.
New Age : Do you think Bangladesh will continue to get GSP facilities? Will it hurt the RMG sector if the facilities are withdrawn?
Atiqul : Yes, we are optimistic that we will be able to retain US GSP.
Based on our sincere and cordial intention to improve on the allegations which have been made in the petition to USTR, we have progressed a lot.
We are satisfactorily heading toward engaging in Better Work Programme with the ILO facilitated by the US Department of Labour, which we believe would further boost the momentum of our progress.
However, if in case the GSP is withdrawn, it will definitely go against the image of the country.
New Age : What the BGMEA would do to overcome the controversy surrounding the BGMEA building on Hatirjheel ?
Atiqul : There is not much scope to comment on this, because this is a sub-judice matter. What we can say is that BGMEA has full respect for our Constitution and the law of the land and we are moving within the law.

-With New Age input

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