Amid the second wave of COVID-19, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Rubana Huq has written an open letter to extend the timeframe of loan repayment from the COVID-19 stimulus package along with ease of other rules.
As, in a recent letter issued by Bangladesh Bank, it has been directed commercial banks to take steps to ensure repayment of loan incentive by the 3rd week of January 2021.
The loan repayment in 24 monthly installments was planned to start in January.
But Rubana Huq said they need one more year to repay the loans due to the recent global breakout of the pandemic for the second time.
She highlighted the awful condition of readymade garment (RMG) exports due to the devastating global economy, especially Bangladesh’s main apparel export destinations the western markets.
She depicted the terrible scenario by saying, “If the loan tenure is not extended, the apparel industry will need a six-month extension of the moratorium of the salary stimulus package as the second wave of the pandemic continues to devastate the US and Europe.”
She said this is one of the most tragic turns in our apparel industry. In the absence of proper restructuring or even an exit policy, shrouded by western bankruptcies, hounded by buyers’ unforgiving contracts and force majeure clauses, factories are facing turbulent times.
Huq told, “Perception of the industry doing well and getting all the favors from the government must kindly be reassessed today. Otherwise, jobs of 4.1 million workers will be at stake.”
The recently published Export Promotion Bureau (EPB) of Bangladesh’s export performance data showed that December 2020 portrays a troublesome scenario of RMG exports.
RMG has had a successive negative export in December by posting negative growth of 9.64%, wrapping up the annual export performance for 2020 with an unprecedented fall of 16.94%.
In December, woven item export posted the poorest performance since June 2020, as it declined by 18.07%.
While the knitwear export managed to have a comparatively steady position with -0.45% growth in December, thanks to the growing demand for apparel for home use.
However observing at 2 years trend, it is clear that growth between October 2018 and 2020 was -26.03%, and November 2018 and 2020 was -14.32%.
The two years change in export for December is -8.55%, meaning that we exported 8.55% less in December this year compared to what we exported in December 2018!
Thus, given the negative effect of lockdowns in Europe and the USA and their impact on retail and demand, the worst ever Christmas sales the world has seen, and most of all the effect of price decline (which is around 5% since September 2020), it was a dark year for the Industry that we have seen.
As the fears and anxieties caused by the COVID-19 second wave continue coupled with the vaccine yet to roll out, and the impact on the global economy it would leave, this downtrend in export will probably continue till April of this year.
“I seek all your help to look at the industry perspective and help us frame our narrative for policymakers to pay heed to the real situation and not the perceived one,” she concluded.