The knitwear manufacturers in Bangladesh sought policy support from the government to address the losses incurred during the quota reform movement-led violence. Saying that they cannot overcome the crisis without government support, they also sought loans at a 2% interest rate for a year.
Mohammad Hatem, Executive President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), stated that the sector was hit hard by the violence of the last 2 weeks. He also said that they have to pay workers next week and if the wages are not paid on time, a vested interest group may take advantage of it. In this regard, they sought bank loans mainly to pay workers wages to deal with the financial crisis and this is not an incentive.
Industry insiders said that around Tk5,000 to Tk6,000 will be required for one month’s wages of the workers in the garment industry along with electricity and gas bills. Usually, the manufacturers only get payment when the foreign shipments reach and the document comes to the bank. But due to the quota reform movement, the shipment was not possible against the orders received from the buyers. Moreover, many shipments have to be resent through air which led to an increase in cost, said the industry insiders.
Mohammad Hatem also demanded that the central bank should postpone the installments of ongoing loans of the industry for the next six months (till January 2025). Regarding the port, he said that due to the situation in the last two weeks, the port authorities could not release the containers arriving at Chittagong and other ports on time which has resulted in container congestion, which may take a month, month and a half to normalize. However, the port authorities levied port demurrage charges to clear the containers. He urged the authority not to levy port charges from July 15 to August 30 to protect the businesses. He also said that the members of the BGMEA will get a demurrage waiver as compensation for their economic losses due to the recent unrest. He demanded the same facilities for the BKMEA members also.
Meanwhile, the BKMEA sent a letter to Finance Minister Abul Hasan Mahmood Ali on July 28 seeking four-point proposals including low-interest loans, several policy assistance, a one-month waiver of container discharge delay charges due to port congestion, and demands for speedy full rollout of internet services.
As the conflict escalated due to the quota reform movement, a curfew was imposed from midnight on July 19. Later, the government declared a general holiday and after four days, when the curfew relaxed, the factories in the country started operations from July 24 to the port operations.
BGMEA said that the loss to this industry during the days of closure was Tk11,500 crore. Moreover, there has been a loss of Tk3,000 crore to the washing and backward linkage sector, according to the industry insiders.
