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EU’s €117 mn aid for jobless RMG workers stalled

Amid the COVID-19 shutdown, thousands of Bangladesh apparel workers lost their job. One of the main reasons is that a lot of western buyers and retailers have canceled orders or halted due payments. Creating a deep crisis in the world’s second-largest apparel export country. Amid this situation, the European Union declared to aid €117 million in incentives for Bangladesh’s apparel factory workers who have lost their jobs because of the COVID-19 crisis. But this amount is stuck due to the absence of a list of fired workers, a proper work plan, criteria of the jobless workers and consent amongst the apparel owners barred Bangladesh from finalizing a decision on the proposal three months into getting the proposal.

EU-aid-jobless-RMG-workers-stalled
Figure: Uncertainty clouds the fate of the European Union’s €117 million in incentives to help out Bangladesh’s apparel factory workers who have lost their jobs because of the coronavirus crisis.

The govt’s Economic Relations Division plus the apparel factory owners say they are thinking about sitting with officials of the EU embassy in Dhaka soon to determine who will get the incentives and how.

Globally, the COVID-19 pandemic devastated the economy earlier this year, causing an extensive cut in consumption and joblessness. According to the readymade garment (RMG) entrepreneurs of Bangladesh, the sector lost Tk 250 billion apparel orders within the beginning of the crisis. The foreign buyers later restored some orders as the economies reopened.

The apparel worker rights groups stated that hundreds of thousands of workers in the RMG sector lost their jobs in May and June as several factories were closed.

Earlier Bangladesh textile and apparel sector lost Tk 250 billion worth of orders due to the crisis. Though the foreign buyers later reinstated some orders as the western economies reopened.

In this scenario, the local apparel exporters communicated the EU with a demand not to cancel orders and force the buyers to obtain products.

After some rounds of discussion, the EU proposed the incentive plan for the jobless apparel workers.

Mohammad Ali Hossain, an official at the ERD’ European division, said the bloc wanted to give a total of 117 million euros, with Germany giving 20 million euros.

Discussions were held as to who will get the help and how much, he said. “More discussions are being held. We hope to conclude a decision this month,” Ali Hossain added.

RMG sector businesspersons said the proposal got stuck due to complexities mainly over the definition of the jobless workers and determining the number of such workers.

Rubana Huq, President of BGMEA, said they sought EU aid considering the situation in March, but government incentives to pay the workers and reopening of the factories have altered the picture.

Now they are thinking about ways to help the factories that were ineligible for the government’s loan help and struggling to pay the workers, she said.

The EU cash could be used to aid the workers of the factories that want an exit route due to a financial crunch, Rubana added.

The EU incentives will come in handy if the authorities use the money for food, medicine, or hospital for the workers instead of supplementing pay, added Rubana.

Nazma Akter, the President of workers’ group Sammilita Garments Federation, said discussions on the issue are supposed to resume next week.

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