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Impact of ‘hartal’ on textile-clothing business

Imported feed stocks (fiber, yarn, fabric, dyestuffs, and accessories, etc.) and conversion of those feed stocks into finished clothing items and exporting them makes our clothing business, and it is indeed the backbone of our economy. Current political violence and strikes are hindering all sorts of free movement of goods and people hence both import and export are affected that is paralyzing our clothing business.

Political violence is nothing new to Bangladesh, results of blame game of political parties. Political strikes or hartal is a democratic right as ours is a democratic country. A political strike is directed against the government in its capacity, as a government seems to be failure in public issues. A strike is suggested by both bargaining perspective (unemployment, earnings, and inflation) and the political perspective (unionization and democracy). Lower unemployment rate and higher earning significantly decreases strike while unionization and democracy significantly increases strike volume.

The tolls are counted as production loss (30%-50%) due to absence of (20%-30%) workers, increased working hours, raising cost of production (30%-40%), loss of productivity, loss of competitiveness for the country’s pivotal industrial sector, i.e., clothing sector. Our clothing production capacity is 15%-20% lower in comparison to orders placed in Bangladesh every year. Political unrest widens the gap substantially. During strike, in house production is possible to keep under controllable difficulties, but the shipment activity which is an outdoor job, remains at hault. Though the clothing production is exempted from ‘hartal’ purview but the transports/vehicles used to transport raw materials and finished goods are not exempted from the strike purview.Thus, a number of small and medium level clothing entrepreneurs are forced out from the sector due to late shipment which faces threat of discount, cancellation of orders, air shipment (approx. 11 times costlier than sea shipment), and deferred payment from buyers.

On going strikes, send negative image of the country abroad. The buyers are forced to change the out source destination from Bangladesh to India, Cambodia, Sri Lanka and Vietnam as happened during political instability of Pakistan, the buyers had to switch to Bangladesh.  The export orders worth over USD 500 million have already passed to Indian suppliers and it may further move out if the situation continues to deteriorate. Bangladesh is facing a similar situation and analysts say the same regional power, which was at the back of the Sri Lankan tragedy. A renowned brand ‘Disney’ is moving out from Bangladesh as report said. If current turmoil doesn’t stop,  order placing for upcoming spring 2014 season will be affected.

In last fiscal year, our key export industry had to count additional USD 500 million due to strikes, shutdown and vandalism that resulted in additional transportation costs and port charges. A one day ‘hartal’ causes an estimated cost of USD 20 million, while consecutive ‘hartals’ multiplies the loss of one day loss. After the strike, every department involves in clothing business faces ‘bottle neck’ problems in the production, transportation, loading and unloading of containers and etc. Industry experts termed this political strike as ‘suicidal move’ for our industry.

Bangladesh clothing industry has been trying to attract non-traditional markets of Latin America, Africa and East-Europe and to diversify markets to Australia, Brazil, Chile, China, India, Korea, Mexico, Russia, South Africa and Turkey, but such negative image of country with so worse political violence, may erode  all our efforts done already.

The Bangladesh Textile Today (BTT) as the well wisher of the Bangladeshi textile and clothing business places request to the respective authorities or political parties to exempt all directly and indirectly involved activities of RMG-Textile industries from all sorts of ‘hartal’ and political violence.

If anyone has any feedback or input regarding the published news, please contact: info@textiletoday.com.bd

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