RMG awaits fresh stimulus?

The country's readymade garment (RMG) sector is expecting to get another big stimulus package from the government to face the ongoing crisis caused by the coronavirus pandemic. 

In the meantime, the stakeholders in the sector have got a positive assurance from the concerned policy makers of the government. 

RMG owners hope a formal announcement in this regard will be made soon.   

Recently, in a virtual meeting organized by the Commerce Ministry on the occasion of announcing the export target for the fiscal year 2020-21, the representatives of the RMG sector had called for the loan facility again to pay wages of the workers from July to September.

In response to their call, Private Industry and Investment Adviser to the Prime Minister, Salman F Rahman, promised to hold talks with the Bangladesh Bank Governor on re-lending to garment industry owners from the Tk 30,000 crore incentive fund announced by the government. 

The government on its own announced a stimulus package of Tk 5000  at the very beginning of the virus outbreak for the sector with which the owners provided workers salary and wages for the month of April, May, and June. 

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) former president Siddiqur Rahman, present at the webinar among others, told journalists, "We have said to make arrangements from the central bank to issue a circular, so that we can take loan from the government announced fund, and pay salary and allowances  of the workers for the next three months". 

When asked about the previous stimulus package, he said, "earlier the government gave us a package of Tk 5000 crore to pay the salaries and wages. But as the loan was not sufficient, we had to take a loan of Tk 2500 crore from the government’s other fund." 

"This time we are asking for another loan of Tk 7500 crore with which we will be able to pay workers for the next three months. To get another loan facility we have also written to the finance minister," he added. 

After getting positive assurance from the Prime Minister's Private Industry and Investment Adviser, the sector concerned has become hopeful of getting the loan facility, but in the meantime they have not responded to the same written request to the concerned government ministry.

It is to be noted, BGMEA and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) on June 22 wrote to the Finance Ministry for another loan facility. 

The subject of the letter was to allocate another fund at low interest so that garment owners can pay worker salaries and bonus for the next three months. 

The letter further stated that RMG entrepreneurs are in deep concern over paying worker salaries, maintaining operating costs, and others. Most of the factory owners will not be able to pay workers salaries for the next three months as they do not have adequate work orders. Hence, the letter requested the ministry to take proper steps for another loan at low interest.