Garment owners want incentive to pay workers’ wages, bonuses

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the Bangladesh Textile Mills Association (BTMA), and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) have called for incentives again to pay wages and bonuses to their workers on the occasion of Eid amid the second wave of the pandemic.

The organisations jointly sent a letter to the Minister of Finance on 24 April in this regard.

In the letter, garment owners have requested the government to provide loans on easy terms like last year to help the export-oriented garment industries to pay salaries, allowances, and bonuses to their workers for April, May, and June 2021.

The letter was signed by BGMEA President Faruk Hasan, BTMA President Mohammad Ali Khokon and BKMEA President AKM Selim Osman MP.

According to the letter, due to the second wave of the Covid-19 around the world, lockdowns have been reintroduced in many countries for which buyers who promised payments are now showing reluctance to do so. This has put the exporters in the country under immense pressure to pay wages and bonuses to the workers.

The entrepreneurs are also struggling with their finances which has made it difficult for them to pay their workers properly, the letter added.

The letter said that due to the cancellation and suspension of orders and delayed payments, the garment sector is now in a dire financial crisis.

"Bangladesh's garment industry exports garments at a lower price than other countries to maintain export potential in the world market for which profit in this sector is very low. Garment owners are forced to take orders facing loss in most cases. And, employees in this sector are paid after receiving payment from the buyers and incentive for cash assistance," the letter read.

"The exporters now are unable to apply for cash assistance due to non-repatriation of export value. Many buyers are also completing the payment at a discounted rate, making it harder for the institutions to solve the liquidity crisis," the letter continued.

The letter also said that many international buyers have declared themselves bankrupt amid the Covid-19 crisis, making it uncertain whether the garments will receive payments for the exports. So, the garment owners in the letter urged the government to provide an incentive so that garment owners can have the help they need to solve the crisis.

Last year, the garment sector received a loan of Tk10,500 crore from the promotional package announced by the government to pay the workers' wages for April to July of 2020 which was initially supposed to be repaid within two years with six months' moratorium facility. Later, at the request of the owners, the moratorium facility was extended for another six months.