When the whole world is at the crossroads, can Bangladesh be any different? Coronavirus or Covid19 as it is now more commonly called has changed the dynamics world over– from businesses to the lives of the common people.
As consumer spending on clothes has taken a backseat in the backdrop of the existing scenario and retail stores are downing the shutters, an impact on order placements was very much on the horizon. Consequently, impacting the complete supply chain!
A recent survey found that major fashion retailers that are closing shops and laying off workers in Europe and the US have not only cancelled orders in production, but in many cases, even those orders that are/were already completed are being called off. Most of the ‘big fi shes’ are reportedly resorting to ‘force majeure’ clause in their contracts that is usually used in case of natural disasters or war
What is worse is that ILO estimates that 25 million jobs may be lost in the wake of current crisis! Not to forget that Bangladesh being a manufacturing country, its garment sector provides 80 per cent of the country’s export earnings and the reality is certainly grim.
Even though many buyers have reportedly promised to take the shipments now, but in most cases, there’s no written commitment it seems. And the ones who have agreed to do so are now asking for longer payment periods, ranging from 60-190 days.
The result is already here to see. After large-scale order cancellations – which runs to a whopping US $ 3.15 billion by some estimates – garment makers are now bracing for a signifi cant export fall. Exports decliningtoa staggering US $ 5 billion! This is what the garment makers of the country are apprehending between March and May ’20.
The BGMEA has reached this conclusion based on the data provided by the Export Promotion Bureau (EPB) and National Board of Revenue (NBR). Now that the country is under shutdown till 25th April, and considering that it takes around 3 weeks to ready an order, and with the holy festival of Eid and ensuing holidays coming up by May, it would be diffi cult to prepare orders for shipments next month as well.
Even though the Government has announced a Coronavirus bailout package of Taka 50 billion to pay wages to the workers who are employed in all the export-oriented sectors of the country, industry insiders believe the amount is just not enough to serve the purpose. BGMEA member factories alone pay around Taka 4,000 crore in wages every month. Then there are the member factories of the BKMEA and other export-oriented sectors like pharmaceuticals, ceramics, leather and leather goods, etc.
However, despite the challenges, manufacturers are not sitting back. Besides having paid or trying to paywages to the workers, many manufacturers have even joined hands to help the Government in its fi ght against Covid-19 by manufacturing PPE for the frontline warriors like the doctors and the paramedics. The move got a further boost after the Government approved a joint initiative – Pay It Forward, the Manush Manusher Jonno Foundation, BGMEA, Marks & Spencer, the Arunachal Trust, and the BUET Alumni Association – on design and fabrics developments.
Even though there’s a lot of uncertainty and confusion as to what would be the world order and business scenario post the pandemic, I am sure, the garment manufacturers of Bangladesh would surely be able to fi nd their way through, as they have done time and again despite unsurmountable challenges. For the time being, all we can do is pray for everyone’s well-being and hope that the epidemic comes to an end soon.