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Apparel factories back to full employment

Finds a study by Sanem and MFO

Garment factories are recruiting the workers left off earlier in the face of order cancellations by Western buyers due to coronavirus was spreading all over the world.

A study by the South Asian Network on Economic Modeling (Sanem) and Microfinance Opportunities (MFO) is showing a promising development for the sector that includes more than 4 million, most females contribute the lion’s share of export earnings. Thus, employment in the factories is close to scaling back to pre-pandemic times.

Sanem-MFO-study-BD-Apparel -actories-back-employment
Figure: Employment in the RMG factories is close to scaling back to pre-pandemic times.

“This is due to a rise in work orders by foreign buyers,” said Selim Raihan, Executive Director of Sanem.

A 40-year-low in April, exports picked up from May like 2019. Garment shipments picked $2.4 billion in September, up 4.3% year-on-year, according to data from the Export Promotion Bureau. For its sake, food security enhanced from 3% in April to 54% in September, the study found. Now it’s very crucial to retain jobs and take measures to protect them from the second wave of the pandemic, Raihan said at a webinar titled “What’s Going On?

Exports, as well as the working hours in June-July, are increasing due to the shipment of the un-exported orders of previous months, said Rubana Huq, President of the Bangladesh Garment Manufacturers and Exporters Association. Between June and September, shipment increased by $10.3 billion were in contrast to $10.4 billion a year earlier.

The life of the garment workers of the importing countries will be heavily affected in the second wave that needs to develop a backup plan for the garments sector to safeguard workers, she added.

Bangladesh needs to devise its policy considering its unique need, to retain jobs in the garment sector.”

Tuomo Poutiainen, Country Director, ILO

“Bangladesh needs to devise its policy considering its unique need, to retain jobs in the garment sector,” said Tuomo Poutiainen, Country Director of the International Labour Organisation.

He emphasized diversification in the garment sector as well as the necessity of production of higher value products to avoid unfavorable situations.

Digital means for salary disbursement was chosen for the pandemic situation is now appeared to be tapering off.

Getting government financial support, the garment owners went back to their traditional method for salary disbursement soon after July.

In April, only 28 percent of the garment workers were paid digitally, which rose to 76 percent and 77 percent in the following two months. In September, it stood at 60 percent, while manual payment rose 40 percent.

“Interestingly, women started to save money in their digital wallets, which was not seen before,” said Snigdha Ali, Program Officer of Bill and Melinda Gates Foundation’s ‘Financial Services for the Poor’ Bangladesh team.

These positive changes will not be sustainable without a concerted effort from every stakeholder of the industry.

She also feels the need for training on digital financial skills and awareness-building programs to make women free to use digital wallets.

Wage digitalization could reduce costs for a firm by around half a dollar per worker, said Mizanur Rashid, the Chief Commercial Officer of bKash. For the wage disbursement process, bKash also subsidize on charges.

“But it was not a sustainable solution for the long-term.”

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