BGMEA Reports $300-400M Loss Due To Unrest Garment Sector

Khondaker Rafiqul Islam, the President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), stated that the unrest in the garment sector after August 5 has caused an estimated financial loss of $300-400 million.

He shared this information today, Saturday (October 19), during a press conference held at the BGMEA Complex in Uttara.

In his speech, the BGMEA President said that efforts are still ongoing to assess the exact amount of damage caused by the ongoing unrest in the garment sector, and the losses could increase further.

Expressing gratitude to the government, the military, and all other concerned parties, the BGMEA leaders said that with the cooperation of the government, employers, workers, the military, and law enforcement agencies, the BGMEA board has been able to manage the crisis effectively.

The leaders mentioned that when uncertainty arose about paying August's wages in the garment factories, BGMEA sought help from the Finance Advisor and met with the Governor of Bangladesh Bank. Following BGMEA's request, Bangladesh Bank instructed the banks to ensure the payment of wages and allowances for the month of August.

Khondaker Rafiqul Islam added that international buyers still have confidence in Bangladesh's garment industry.

He further said that due to the BGMEA board’s dedicated efforts, under government instructions, a joint force led by the military was formed to ensure the safety of garment factories. This joint force has been regularly patrolling the garment-manufacturing zones to maintain security. BGMEA also introduced community policing with the help of the military.

The BGMEA President mentioned that 39 garment factories in Ashulia, damaged due to labor unrest, could not pay the wages and allowances for September. BGMEA has requested the Ministry of Finance to provide interest-free soft loans to these factories to ensure wage payments for September.

To maintain the sector’s competitiveness and to advance it further, BGMEA sought the government's assistance on the following issues:

• Ensuring law and order in the industry.
• Simplifying and expediting customs and port-related processes.
• Avoiding unnecessary delays in full loading and unloading at Chittagong Port.
• Ensuring that utility connections for factories are not disconnected for the next three months during this critical period.
• Reforming the banking sector in a way that does not negatively impact production and commercial activities.
• Ensuring that no business is harmed by actions taken against individuals.
• Forming a task force comprised of the NBR (National Board of Revenue) and Bangladesh Bank to draft business-friendly policies for the industry.
• Ensuring an adequate power supply to the sector and determining reasonable electricity prices, along with formulating a sustainable energy and electricity policy.
• Avoiding the classification of loans against all types of credit and allowing for the rescheduling of loan repayments as per Bangladesh Bank's BRPD Circular No. 44, dated October 14, 2024.
• Instructing the relevant authorities to supply gas to factories urgently through cylinders from CNG stations to ensure the continuity of production.
• Keeping the removal of recyclable waste, such as textile scraps, free from external interference.
• Considering the reinstatement of incentives, given the importance of the garment sector.
• Providing a safe exit policy for garment industry entrepreneurs.
• Bringing those responsible for causing unrest in the sector under strict legal action.

In mid-July, the then Awami League government led by Sheikh Hasina imposed curfews and internet blackouts to suppress student protests demanding quota reform, which severely impacted garment manufacturing.

After the new government led by Nobel laureate economist Dr. Muhammad Yunus was formed, various labor groups began raising demands.

As a result of workers' protests, factories were closed for about 15 days.

Thousands of workers took to the streets in the industrial areas of Ashulia, Zirani, Savar, Tongi, and Gazipur. Some were accused of vandalism and arson.

In response, factory owners closed down one factory after another to avoid unrest and protect their properties.

With the breakdown of law and order following the change of government, the protests intensified.

Due to attacks on police, members of the industrial police stopped patrolling the industrial areas.

Additionally, following the government transition, there were changes in the police administration, rendering most police stations ineffective.

As a result, factory owners were afraid to operate their businesses.

Even with the help of the military, factories could not be reopened, as the military lacked magisterial authority. Consequently, most factories in Ashulia, Savar, Zirani, and Zirabo remained closed, and many experienced acts of vandalism by workers.