Abdullah Hil Rakib: The issue of factory owners being unable to pay their workers is a multifaceted problem that cannot be explained in a single sentence. Several interconnected factors are contributing to this crisis, many of which are rooted in the evolving political and economic landscape.
First, there has been a noticeable distinction between the roles of the current government and an interim government, particularly in how they manage law enforcement post-protests. This shift has significantly affected the industrial sector. In the past, when workers protested, disputes were often resolved through mediation facilitated by law enforcement, particularly the industrial police. However, a leadership vacuum and diminished law enforcement support have created a gap in resolving industrial conflicts effectively.
While the situation has slightly improved since August and September, the sector is far from achieving stability. Coordination issues within law enforcement agencies persist, further exacerbated by structural changes introduced in November 2023. These factors have contributed to the closure of approximately 106 factories, raising critical questions about the sustainability of the industry.
Financially, the sector is under immense pressure. Over the past five years, production costs have surged, with the implementation of the 2023 wage structure alone leading to a 56% increase in wage expenses. For context, in my six factories employing 23,000 workers, the net payroll expense rose by 1.09 billion BDT. While larger industries may manage these costs, small and medium enterprises (SMEs) face significant difficulties in sustaining such financial burdens.
Compounding this is the sharp rise in power costs, which have increased by 286%, alongside persistent power supply inconsistencies. Key facilities, such as dyeing and washing plants, often experience power outages during the day, leading to heightened operational costs. This combination of escalating expenses and erratic power supply has critically disrupted cash flow for many businesses.
The liquidity crisis within banks adds yet another layer to the problem. With delayed transactions and restricted access to capital, factory owners are struggling to meet financial obligations, including payroll. When wage costs increase by 56%, power costs by 286%, and banking liquidity dries up, the challenges become insurmountable for many, threatening the very survival of the industry.
This complex interplay of rising costs, disrupted cash flow, inadequate governance, and external economic pressures has created a perfect storm, leaving many factory owners unable to sustain their operations, let alone pay their workers.
Source: Channel i Talk Show
