Published in: The Daily Star

Date: 13 Dec 2020

The garment sector is on way to receive a second round of stimulus, with government plans reasoning that it has been severely affected by the second wave of the coronavirus pandemic.

“If the situation worsens further, the government is ready to give (it),” said Commerce Minister Tipu Munshi at a virtual event of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) yesterday.

He, however, made no mention of the exact amount and repayment period.

“The government is open-minded. We are seeking suggestions from different quarters about launching the second stimulus package. The BGMEA has already sent me a letter seeking such a fund again,” he said.

Moreover, the payback period of the first stimulus package, delivered in the form of low-cost loans, might also be extended, said Munshi.

The BGMEA has demanded that the present six-month moratorium period be extended to one year and the loan repayment period to five years from one year, he said.

“We have to help the trade to survive,” the minister said, adding that the government targets to export $48 billion-worth merchandise and services in the current fiscal year.

The first stimulus package, provided through banks between April and August, allotted Tk 10,500 crore for the export-oriented garment sector to pay workers’ wages and allowances.

The garment manufacturers and exporters are paying only a 2 per cent service charge for the interest-free loan.

Another Tk 33,000 crore was disbursed for large-scale industries and Tk 20,000 crore for cottage, micro, small and medium-scale industries.

The Prime Minister Sheikh Hasina-led administration has also set aside Tk 12,750 crore from Bangladesh Bank’s Export Development Fund to give low-cost loans to the export-oriented sectors.

“We will sit in discussion soon about the (second) stimulus package issue. Definitely we will consider it if we get suggestions from you,” said Cabinet Secretary Khandker Anwarul Islam.

The country coped well with the first wave, but it seems the second one will be of a bigger magnitude, he said.

Citing a recent International Monetary Fund report, Islam said some of the Covid-19 fallouts might push 208 million people globally under the ultra-poor bracket.

“So, the government has been working mainly to protect the economy and trade,” he said.

Islam said the government has been working sincerely to make it easier to do business to protect the economy from the aftereffects of the nation’s graduation from the least developed country category by 2024.

The cabinet secretary said the impact of the fourth industrial revolution might exceed that of the pandemic as the associated technological upgrades might affect the jobs of 53 lakh professionals across the country.

For instance, BMW Group in Germany and Adidas have already replaced human beings with robots at the production stage, leading to hundreds of professionals losing their jobs.

So the country’s current education system needs to be streamlined to produce skilled manpower, he said.

The government has also been working to save the small and medium enterprises by providing different kinds of support so that those can grow further to contribute more to the economy, he added.

Yesterday’s event was on launching “Go Human, Go Green”, an initiative of the garment makers’ body working on bringing about welfare for the apparel sector and its workers in seven ways.

Under the seven “pledges”, the BGMEA will get 100 female workers graduated from the Asian University of Women in Chattogram, said BGMEA President Rubana Huq.

Four of 70 such workers who had enrolled have already graduated and the BGMEA will organise a programme on December 16 to celebrate their achievement.

The association also launched programmes on providing education to garment workers’ children at daycare centres in collaboration with JAAGO Foundation and on providing mental healthcare to garment workers through psychological counselling.

The apparel trade body has already set up some Covid-19 testing labs for workers and involved 50 factories in preparing a sustainability report in collaboration with the UNDP and Global Reporting Initiative.

The last two are aims for working with retailers and brands to increase sales of traditional products associated with local heritage and for creating a centre for improving skills, innovation and competitiveness.

The factory managements will pay for the fulfilment of the pledges in the greater interest of the garment sector, said Huq.

Source:

https://www.thedailystar.net/business/news/govt-plans-fresh-apparel-stimulus-2010517