Bangladesh garment industry wants loan stimulus package to be extended
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has warned the industry could collapse unless the government agrees to extend a scheme to lend garment manufacturers money to pay wages due to the pandemic. They want the government to extend salary stimulus package by six months and put back the deadline for loan repayment by one year.
Rubana Huq, President, BGMEA wrote an open letter and said meeting the scheduled repayments to the government-owned Bangladesh Bank from the end of this month - as agreed - would force many garment manufacturers out of business. Without the moratorium of salary stimulus package being extended by six months or the tenure of the loan being extended by at least one year (currently 24 months) the industry will collapse.
According to Huq, the country's apparel exporters have already borrowed a about 105 million Bangladeshi taka from the salary stimulus package to pay workers' wages during April, May, June and July last year. Although factory owners agreed to repay the money in 18 instalments from the end of this month data released by the Export Promotion Bureau suggest the industry was still facing difficulties.
The country's export earnings in 2020 fell 14.57 per cent to $33.60 billion from $39.33 billion in the previous year as the pandemic hit global economy. Export earnings began to increase again from June but the second wave of COVID-19 started taking a toll from October, with RMG exports in December down nearly 10 per cent compared to previous year.
The Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) too called for minimum wage to be frozen for two years to help members survive the economic impact of COVID-19. However, unions said garment workers were already facing abject poverty and urged the government to reject the plea.