Clothing makers want more stimulation

Garment factory owners are asking for more stimulus money from the government to pay three months wages in addition to festival allowances to workers.

“We demanded that the government grant us low-cost funds to pay salaries for April, May and June and holiday allowances to workers,” said Faruque Hassan, president of the Garment Manufacturers and Exporters Association. of Bangladesh (BGMEA).

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Newly elected BGMEA leaders made the demand during an emergency meeting at the trade body’s Uttara office on Saturday.

Hassan said they did not mention any specific amount to the government, but that of three months wages and allowances for the workers.

Workers in export-oriented garment factories receive about Tk 3,000 crore every month in wages. “So the amount is already estimated and only the allowance money would be added,” Hassan told the Daily Star by phone.

“We have called the emergency meeting with our board members as we learn that some factories will face difficulties in paying workers’ wages and allowances in the run-up to Eid,” he said. Hassan.

But at the same time, workers are not expected to go unpaid at such a crucial time, he said.

“So I suggested to the owners of the factory to be prepared to pay the workers on time so that no untoward incident occurs in the sector before Eid or in times of Covid-19,” said Hassan.

Many garment factories, especially small and medium-sized ones, are struggling as they struggle to survive on fewer work orders from international retailers and brands in the time of Covid-19.

“So they need government help,” Hassan said. “I also urged banks to continue supporting suppliers.”

Commercial banks affiliated with garment factories have already activated mobile financial services (MFS) accounts through which workers already receive their wages and allowances.

Last year, the government provided Taka 10,500 crore in stimulus funds to the export-oriented garment, leather and footwear sectors for payment of wages and allowances at just 2% fee on duty.

However, factory owners have been lobbying the government for a moratorium and postponement of refunds as most garment exporters have been unable to return to normal business practices due to the second wave of Covid-19. .

The apparel sector went through a tough time as many of the major export destinations in Europe and the United States were in lockdown due to Covid-19.

However, as the economies of some supplier countries like China and Vietnam have started to reopen, Bangladesh has gone into lockdown, although the garment sector is outside its purview.

Local clothing suppliers have been running their factories amid challenges since March last year due to a shortage of work orders from international retailers and brands.

Last year, local suppliers faced order cancellations or holdups worth $3.18 billion and unusual payment deferrals.

So far, some 90% of work orders have been reinstated through intense negotiations between the BGMEA, government and suppliers with retailers and international brands.

But uncertainty remains as retailers and brands have not confirmed when they will finish paying local suppliers.

Michael O. Stutler