The country’s Ready Made Garment (RMG) sector needs to be offered more times and flexible repayment schedules to pay back loans in order to get the advantage of survival as the second wave of Covid-19 is now surging in different foreign countries mainly the US and Europe.
Entrepreneurs of the sector have been hit hard by the ongoing second wave, even though the first blow of the Covid-19 has somehow been overcome due to the government’s timely stimulus package. In this situation, the loan installment has become a new pressure. As per the previous schedule businessmen have to repay the loan installments given under the incentive package from this month.
However, as most of the garment factories have stopped production, the garment owners are facing difficulties in repaying the loan installments and urged for grace period.
Garment owners informed that there is no indication that the global sales situation for clothing will fully recover. Many countries in the West are still locked down. They are fighting to get the economy back on track. The products that have been exported now are of the previous order. Buyers are not placing any new work order. And even some orders are placing, they are only 40 percent of the total capacity. In this situation, it is difficult to predict what will happen in the coming days, said several garment owners.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Director Anjan Shekhar Das while talking to The Bangladesh Post said that, “We are able to return the loan amount but for this we have to have sufficient work orders in our hand. In the face of second wave of pandemic, we are not having work orders as we supposed to have at the beginning of a new year. In this situation we must need a grace period of six months to start payback of loan installments.”
“As coronavirus vaccine is about to arrive, we hope a rapid change in terms of coronavirus will appear and everything will get back its previous rhythm. At then our export order will also increase following the withdrawal of lockdown in foreign countries,” he added.
According to BGMEA, ready-made garments may remain sluggish till April. Because not everyone in Europe-America has yet received the vaccine and their economy is still stagnated.
Economists said exports are likely to be hurt in the next few months. Although the situation of coronavirus in the country has not deteriorated, there is a rampant situation in Europe. If it hits the export sector, then the whole country’s economy will suffer.
According to sources, 80 per cent of Bangladesh’s total exports come from readymade garments, the driving force of the country's economy.
Policy Research Institute (PRI) Executive Director Ahsan H Mansoor said that, “The ongoing pandemic situation in Europe could affect our exports. Meanwhile, exports have slowed down. If ready-made garments, the main source of foreign exchange earnings, are damaged, it will have an impact on the entire economy.”
First vice-president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Mohammad Hatem said, "The garment sector was hit in the first push by Corona. Later, it started to turn around again, but now the second wave has hit. Business in the United States and Europe has stalled. As a result, as shops are opening less, people are buying less clothes due to reduction in their income. As a result, garment exports are being disrupted."
According to the report, about 20 percent of garments are exported to the United States, 54 percent to European countries, and the remaining 28 percent to other countries. Out of the total exports, 74% of garment exports to European and American countries are now under threat.