Revival of garment orders helps to recuperate Bangladesh ‘s economy

garments-jpgAfter demand collapsed during spring shutdowns, a revival of garment orders helps to revive Bangladesh ‘s economy. The key export industry in the country, Apparel Makers, say they look ahead to US and other significant Christmas orders. Remissions from Bangladeshi workers from outside of the country have also recovered, leading to alleviating pandemic pressures almost in the spring. This week, the Asian Development Bank has announced a positive economic recovery. It is expected that, in the financial year ending in June, the economy will continue to expand at a healthy 6.6 percent annual rate. That’s a much brighter outlook than in April-May, when global clothing brands suspended or cancelled orders worth more than $3 billion, affecting about 4 million workers and thousands of factories.

“At the moment we can say that the ready-made garment industry has been able to regain its growth trajectory upward compared to March-May,” Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association, or BGMEA, told The Associated Press. “As economies in the West were turning around we were successfully able to get the buyers back to the negotiating table, which is why 80% to 90% of the $3.18 billion in cancelled orders have been reinstated,” she said.

Bangladesh earns about $35 billion annually from garment exports, mainly to the United States and Europe. The industry is the world’s second largest after China’s. Bangladesh’s exports rose 0.6% to $3.9 billion in July, after plummeting 83% to $520 million in April. Imports, which are reported on a quarterly basis, began recovering earlier, rising 36% in May-June. In August, exports rose 4.3% from a year earlier, to $2.96 billion, mostly driven by apparel shipments, according to the government’s Export Promotion Bureau. Garment shipments totaled $5.7 billion in July and August.

“The garment sector is making a good comeback. Our agriculture is doing well. Remittances are coming. These all are good signs for the economy,” said Ahsan H. Mansur, executive director of the Policy Research Institute, a think tank in Dhaka. “The pace of the recovery is clearly visible. But challenges have been there too. The pace of the recovery will depend on how the pandemic behaves in the West over the next few months,” Mansur said. That’s the inestimable question facing everyone.

Bangladesh had reported more than 342,000 confirmed coronavirus infections and 4,823 deaths. The country confirmed its first positive case on March 8. Some experts say the number of infections currently exceeds the official number. The textile industry claims that few workers have become ill in its factories because of precautions such as less people employed in production lines and safety regulations. On 26 March, the government placed a national lockout, and the apparel industry was shut down for almost 3 months and eventually reopened. ADB Country Director Manmohan Parkash said that “through sufficient economic stimulus and social security initiatives,” the government handled the crisis well.  “We are encouraged by the increase in exports and transfer payments and hope that the recovery will continue to achieve the anticipated rate of growth,” said Parkash.