BUFT Journal of Fashion and Technology

The Impacts of COVID-19 on the Readymade Garments (RMG) in Bangladesh: An Analysis

Email: abdurrakib@buft.edu.bd, provc@buft.edu.bd

Abstract

The ready-made garments (RMG) sector is one of the booming manufacturing sectors than any other in terms of employment opportunity and foreign exchange earnings in Bangladesh. This sector also eliminates poverty and plays crucial role in the national economy of Bangladesh. Along with its distinction, this sector has been facing a serious challenge because of COVID-19 pandemic over the last one and half years which can harm the future sustainability.The present study has made an attempt to identify all the adverse impacts of Covid-19 on the readymade garment sector of Bangladesh. It also aims at finding a suitable solution to cope with all the adverse effects. To accomplish the study, data were mainly collected from secondary sources. Since the inception of RMG in 1978, Bangladesh achieved a tremendous growth by establishing scores of factories in consistent with the export linkage. In the Year 1983-84 this sector contributed $31.57 million from export of finished goods and services. In the Financial Year 2013-14, this sector earned $24.49 billion that represents about 81 percent of countries' total export earnings. It further increases $34.2 billion in FY2018-19 which is 84% of the country's total exports. But in FY 2019-20 the export has been decreasedaround $7 billion to USD 27.95 billion from $34.2 billion in comparison to previous FY2018-19 due to the effects of COVID-19 as all kind of communications and transportation was restricted world-wide. The study shows that USD 3.17 billion orders have been cancelled or suspended by the retailers and brands which threatening the employment and financial security of millions of RMG workers. There are 70,000 workers who have lost their jobs by June 2020 and almost 2.28 million workers jobs were likely to remain at risk and above 70 factories were closed during the last fiscal year. To protect this sector, Bangladesh Government declared an amount of BDT 500 million stimulus package on March 25th, 2020 for supporting the workers' wages and securing their livelihood. The study recommended some suggestions to the government of Bangladesh, factory owners and management, BGMEA and BKMEA, buyers association, workers association, NGOs and ILO to take some initiatives in order to overcome the negative impacts of COVID-19 that will be helpful for improving the conditions of garments sector.