Clothing products exports from the Asian countries including Bangladesh have seen a sharp decline by 70% in the first half of 2020, due to collapsing consumer demand caused by the Covid-19 pandemic, said the International Labour Organization (ILO) report.
The study titled the supply chain ripple effect: How covid-19 is affecting garment workers and factories in Asia and the Pacific was unveiled on October 21, 2020, at a virtual briefing from Bangkok.
To assess the impact of the Covid-19 pandemic on the lives of workers and RMG exports, the study was conducted on apparel factories located in Bangladesh, Cambodia, China, India, Indonesia, Myanmar, Pakistan, Philippines, Sri Lanka and Viet Nam.
The pandemic hit the garment sector in the AsiaPacific region hard, with plummeting retail sales in key export markets affecting workers and enterprises throughout supply chains in the region.
The research findings showed that major buying countries’ imports from garment-exporting countries in Asia dropped by up to 70% in the first half of 2020, due to collapsing consumer demand, government lockdown measures, and disruptions to raw material imports necessary for garment production.
The Asia-Pacific region employed an estimated 65 million garment sector workers in 2019, accounting for 75 percent of all garment workers worldwide.
As of September 2020, almost half of all jobs in garment supply chains were dependent on demand for garments from consumers living in countries with the most stringent lockdown measures in place, where retail sales have plummeted, it added.
Meanwhile, by June 2020, total year-to-date imports from Bangladesh fell by as much as 29%, when compared to the same period in 2019.
Impacts of Covid on Bangladesh RMG sector
Since the pandemic shattered the supply chain and the demands of clothing products fell sharply, 43% of suppliers in Bangladesh were operating with less than 50% of their pre-pandemic workforce during the third quarter of 2020, says an ILO report.
As of September 2020, almost half of all jobs in garment supply chains were dependent on demand for garments from consumers living in countries with the most stringent lockdown measures in place, where retail sales have plummeted
“Factories operational at the start of the third quarter of 2020 – whether they had remained operational throughout or reopened – were reportedly not operating at their pre-pandemic capacity. Approximately 43% of suppliers in Bangladesh are operating with less than 50% of their pre-pandemic workforce,’ said the report.
Only 3.9% of suppliers retained their entire workforce. The largest proportion of suppliers (around 20%) are operating with between 30-39% of the number of workers they had before the pandemic, it added.
On the other hand, as of July, the average proportion of workers returning to work after re-opening was 57% of factories’ pre-pandemic total workforce and a total of 230,749 workers among Better Work Bangladesh’s (BWB) member factories were still not working as factories reopened, the report said.
Currently, 260 RMG factories are connected with BWB.
Comprehensive data on the resulting decline in apparel orders by country is not available, but a Better Buying survey of 179 suppliers from 30 countries including Bangladesh conducted in May 2020 found that 64% of apparel factories received cancellations from customers.
A survey conducted by ILO’s Better Work Bangladesh (BWB) in May 2020 over 250 BWB factories showed, 38% factory faced order reductions or were asked to hold shipments, 34% percent experienced order cancellations, and 4% could not produce garments due to a lack of raw material.
The survey also showed 60% of suppliers kept the factories shut for over 3 weeks, while the largest proportion of suppliers approximately 40% closed for 26-35 working days.
Another survey (March-2020) of Penn State Center for Global Workers’ Rights, found 72% of buyers had not paid for raw materials and 91% had not paid for the production cost of already-produced goods to their Bangladeshi apparel suppliers, who canceled orders.
Worker layoffs and dismissals have increased sharply, while factories that have reopened are often operating at a reduced workforce.
“Thankfully, many RMG exporters have resumed operations over the past few months. At the same time, these resilient Bangladeshi enterprises and workforces are having to wrestle with the ongoing pandemic and ensuring safe conditions for all,” said Tuomo Poutiainen, Country Director, ILO Bangladesh.
To this end, the ILO has supported the development of a national Occupational Safety and Health (OSH) guideline on COVID-19 to mitigate infections in workplaces, he added.
Also, the research identifies how women, who make up the majority of the workers, have been disproportionately affected by COVID-19, exacerbating existing inequalities in earnings, workload, occupational segregation, and distribution of unpaid care work.
How to overcome the crisis
“This research highlights the massive impact COVID-19 has had on the garment industry at every level. It is vital that governments, workers, employers and other industry stakeholders, work together to navigate these unprecedented conditions and help forge a more human-centered future for the industry,” said Chihoko Asada Miyakawa, ILO Regional Director for Asia and the Pacific.
To tackle the COVID-19 crisis, the ILO has proposed a policy framework focusing on stimulating the economy and employment, supporting enterprises, jobs and incomes, protecting workers in the workplace.
It also called for resource mobilization to safeguard jobs and livelihoods, including those in the garment sector.
Continued support for enterprises, as well as the extension of social protection to all, is key to mitigate adverse impacts of the crisis in the garment supply chain, the ILO suggested.
So it is time to rethink about garment supply chains, equality, inclusivity and sustainability. Also, technological innovation is reshaping the possibilities for how and where production takes place, and the role the factory workforce plays in this process, it added.
The recent global ‘Call to Action,’ an international multi-stakeholder initiative facilitated by ILO is also noted as a promising example of industry-wide, solidarity efforts to address the crisis.