The RMG in Bangladesh is second largest after China and it alone contributes 20 percent of the country’s GDP. According to the Asian Development Bank (ADB), Covid-19 will add more 13 million people to existing 34 million people below the poverty line.
Covid-19 has taken a toll of 533 lives in Bangladesh and infected over 36,000 people. The world is ought to change post-Covid-19. However, the readymade garments (RMG) industries of Bangladesh which exported product worth $34 billion in 2019 will face serious challenges. Due to worldwide lockdown of shopping centres, Bangladesh is undoubtedly the worst hit due to this fallen industry since RMG contributes to about 80 percent of their total export and this has incurred a loss of $6 billion to their exchequer.
The RMG in Bangladesh is second largest after China and it alone contributes 20 percent of the country's GDP. According to the Asian Development Bank (ADB), Covid-19 will add more 13 million people to existing 34 million people below the poverty line. RMG in Bangladesh, being labour intensive, the impact of Covid-19 will be more evident. Around half of the 4000 garments factories in Bangladesh have opened on a limited scale last week. This calls for a concerted effort by the government, RMG industries, RMG-associations, financial institutions, NGOs to come forward and work to mitigate the impact of Covid-19 and additionally prepare it for future-ready.
Country's largest RMG body, the 'Bangladesh Garment Manufacturers and Exporters Association' has issued guidelines to factory employers encouraging them to adhere to safety measures and prevent the spread of Covid-19 upon factory re-openings. The government should strictly follow strict international guidelines like enforcing social distancing, daily sanitisations of warehouses and factories, install wall-mounted IR thermometers, provide masks, hands-free sanitizers and washbasin, keep an on-site team of emergency doctors and an ambulance, prep up a vigilance team that closely monitors the employee's travel and family history on a day-to-day basis, and so on.
These measures increase the cost to the company, therefore, industries must have to come with some innovative ideas or 'Jugaad' (a flexible approach to problem-solving that uses limited resources in an innovative way) to save monetary burden on factories.
Another immediate measure the government should undertake is offering an economic stimulus package, especially for RMG. ADB has lent around $3 billion separate from $100 million to support the public health requirements to combat Covid-19. Many factory workers demanded to clear the previous salaries. Salaries should be directly transferred to their account. The announcement made by Prime Minister Sheikh Hasina to allocate $5.8 billion for export-oriented industries is one right step towards clearing the impending wages at 2 percent interest rate. Similarly, an appeal made by the Commerce Minister, Tipu Munshi, to not fire any factory worker is a relief but not enough to the stressed workers which had no option but to leave the area of the factory. If the market demand does not resume, factory owners will have few choices left. To tackle this problem permanently, the government should plan decentralisation of the garment manufacturing process.
Most of the RMG companies of Bangladesh cater to the US and European markets. Sometimes they subcontract these orders to small vendors. Post-Covid-19 is probably also a time to engage in and develop micro-scale industries at individual tailoring/stitching unit at sewing machine level in addition to the sub-contractors. These units situated at workers' residence connected via mobile and road for easy information and goods flow will work as co-operatives.
Amul cooperative is the biggest successful example of co-operatives. Design development, order acquisition from big buyers, raw material procurement and branding are a few money and high - skilled process but the later sewing processes are labour-centric and require limited specialised skill. Decentralisation will have its own cost benefits – the big garment manufacturing houses will lessen its electricity burden, save on space and property rentals, machine's maintenance costs etc. For example, an industrial sewing machine which cost about Tk 18,000 could easily be financed without collaterals by microfinance organisations in which Bangladesh microfinance organisations are efficient. These independent micro-sewing hubs will not just speed up and support the industrial process upon market demands but also increase entrepreneurship among workers beyond Covid-19 period.
More than 80 percent of the workforce at the RMG industry in Bangladesh comprise of women who are vulnerable to workplace exploitations. Decentralization of the garment manufacturing process would not only give more financial and personal security to women but allow them to save commute time if they work from home. Another benefit of decentralization are big factories will be free from noose of labour law which is a major hurdle in labour-intensive industries.
RMG industries occasionally face industrial accidents and fires. Decentralization at micro-sewing level will also decrease casualties due to safety-related issues like fire, smoke etc. High-safety measures further help in improving ranks in Generalized System of Preferences (GSP) and other safety indices helps to build clean cloth image.
RMG industries could take this opportunity to diversify its domain for sustainability. One such measure could be the diversion of garments industry resources to PPE kit manufacturing hub post-Covid-19. China provides the majority of raw materials to Bangladesh's RMG industry, even for PPE. China has embarrassed itself with its export of poor quality PPE. Bangladesh can rise to this occasion though competing with China in manufacturing and marketing is no easy task.
The very limited use of artificial intelligence (AI) by Bangladesh RMG industries is another point of concern. Many online retailers use App-based virtual fitting room. This technology works on 3D body measurement that uses AI in conjugation with computer-vision technology for body scan and deep learning algorithms to analyse images and take precise body measurement. These technologies could be used by factories or online tailor-fit retailers via Apps to take the order of custom-fit or made-to-measure clothing and deliver customised clothes to customers that could be on the other side of the globe.
Automation is ever-changing the labour-intensive businesses and as a venture capitalist, John Chambers reiterated, "40 percent of businesses will not exist in a meaningful way in the next 10 years." Post-Covid-19 is a watershed moment for Bangladesh's RMG to embrace for a sustainable change or perish.
Rajeev Raman is scientist at Leibniz Institute for Neurobiology, Magdeburg, Germany.