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What Next For Bangladeshi Garment Industry After Fall Of Sheikh Hasina Govt

• By  Textile Excellence
• August 06, 2024

The student unrest that culminated in the fall of Sheikh Hasina Government has created a big scar in the export oriented Bangladeshi Ready Made Garment (RMG) industry. As the world’s second largest apparel exporter with US$45 billion exports, almost all large global apparel brands and fashion retailers' supply chains depend on the country. The student protest against quota in Govt. jobs that started in the beginning of July turned violent towards mid-month and witnessed painful loss of hundreds of lives. Normal living was disrupted and garment factories were shut as Government tried to curb the unrest with curfew and strong hand. While the garment factories started re-opening and resumed work after a break of 5 – 6 days in July, the situation remained tense and re-erupted on 4th August leading to lakhs of people marching to capital city Dhaka. The Bangladesh Army’s intervention and Prime Minister Sheikh Hasina’s resignation and fleeing to safety in the afternoon of 5th August ensured a win for the protesting nation but news of violence continued till later part of the day. As the Army, protest leaders and opposition parties are discussing the formation of interim Govt. till hosting the next general election, there are uphill tasks in hand.

The garment industry which is among the major export revenue earning sectors for the country (about 82% of share in Bangladesh’s total export) is among the hardest hit. The unrest has led to loss of reputation and trust from the foreign buyers as well as loss of critical production of export orders. Political stability and peaceful environment are must for any business which are severely dented by the recent developments in Bangladesh. The fall of Sheikh Hasina Government has brought triumphant feel among the protesting mass but formation of a caretaker Government and general election are still far away. Till then export business would sail through uncertainty.

However, with the current status of Bangladeshi economy, the country has no time to spare. The spirit and enthusiasm of the mass must be guided towards productive nation building work and strengthen the economy. Immediate priority could be curbing high inflation, fall in forex reserve, corruption and restarting the factories. Good governance would be a key issue but can’t expect less even from a care-taker government which is on the cards.

Collaborative participation from industry, of course, would be the key to overcome the challenges in hand. Garment factories have lost several days’ production in July and now 3 days are already lost. The total losses due to this would definitely amount to about a billion dollars. Several dozens of factories also suffered the ire of the protesting masses. Even the ports activities were disrupted. It is a trend that July to September is the peak season for shipping goods to western markets for Christmas and booking new orders for the spring/summer seasons. However, the month long turmoil has affected the shipments and new order bookings. The end result would be expensive air shipments, order cancellation or discount offer by the exporters which eventually hurt the sector. Though Bangladeshi garment makers are expecting strong recovery in exports as peace prevails, it would be a task too heavy to handle. Bangladeshi garment industry can’t afford to crawl back to normal production but will need to sprint as they resume operation.

And this will depend on how much stability the interim Government can instill in the country and the economy. Bangladesh cannot afford to slacken RMG exports which is the largest employment generator for the country. Retailers are already establishing shorter supply chains nearer to the market. Bangladesh losing its foothold in the international arena would be a massive loss that would not be easy to recover from. So, better act now before it's too late.

Though Bangladeshi garment makers are expecting strong recovery in exports as peace prevails, it would be a task too heavy to handle. Bangladeshi garment industry can’t afford to crawl back to normal production but will need to sprint as they resume operation".