Govt must act fast to get western travel alerts lifted, urges garment industry

The interim government must make concerted efforts to persuade western nations, including the United States and the European Union, to withdraw their travel alerts on Bangladesh and counter the claims of attacks on minorities, said garment industry leaders. 

They also cautioned that failure to do so could result in a loss of business to competing countries.

Attending a roundtable hosted by The Business Standard on Sunday, Abdullah Hil Rakib, former senior vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), stressed that the influence of Chief Adviser Professor Muhammad Yunus, an internationally respected figure, could be used to remove these travel alerts.

"A letter or even a tweet from him could make a significant impact," Rakib suggested, adding that Yunus's global standing might help to reassure foreign buyers.

Faruque Hassan, former BGMEA president, highlighted the growing apprehension among international buyers. "They are hesitant to visit Bangladesh due to the travel alert. While we are trying to convince them, the process is slow, forcing us to meet them abroad." 

This, Hassan noted, undermines the industry's ability to negotiate competitive prices.

Sirajul Islam Azad, chief human resource officer of Bitopi Group, recounted how a Spanish designer cancelled a planned visit to Bangladesh last week despite having booked a ticket, citing his country's advisory against travel to Bangladesh.

Md Hafizur Rahman, administrator of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), revealed that a US FDA delegation, expected to certify Bangladeshi pharmaceutical products, also cancelled their trip.

"If the travel advisories are not withdrawn, they will negatively impact all sectors," Rahman warned, though he noted that the interim government is working to address the issue.

The participants also mentioned ongoing unrest and deteriorating law and order as another hurdle for Bangladesh's garment industry. 

After the student-led uprising that toppled the Sheikh Hasina administration, it took weeks for police stations to resume operations. Key industrial zones, including Ashulia and Gazipur near Dhaka, have witnessed months of disruption, worsened by blockades from various groups.

Nazma Akhter, president of the Sommilito Garment Sramik Federation, said the seizure of the president's residence demanding his resignation and the dissolution of BGMEA's board of directors had further eroded foreign buyers' confidence.

The roundtable, moderated by Sajjadur Rahman, deputy editor of The Business Standard, was attended by industry leaders, economists, and researchers. Participants underscored the urgency for Bangladesh to stabilise the situation and rebuild trust with international partners to safeguard the country's economic lifeline.

Infograph: TBS

Regaining buyer's confidence

Mashur Reaz, chairman of Policy Exchange Bangladesh (PEB), stated that even after 115 days since the formation of the interim government's cabinet, foreign buyers have yet to regain confidence due to ongoing instability in various firms and industrial zones.  

"We are currently addressing issues like firefighting, but a strategic solution is necessary to restore buyer confidence," he added.  

Mohammad Hatem, president of BKMEA, pointed out that the abolition of the BGMEA board, driven by "personal vendettas", could further erode buyer confidence.

Referring to one of the largest exporters in Ashulia, Hatem highlighted that buyers are reluctant to place new orders in the company's factories there. 

"This negatively impacts workers' jobs, the national economy, and factory owners alike," he warned.  

Introduce minimum wage for all sectors 

The BKMEA president said there are 44 sectors in the country and asked how many of them have a minimum wage structure. 

"The government should establish a national minimum wage for all sectors," he suggested.  

Sirajul Islam Azad, chief human resource officer of Bitopi Group, proposed that the minimum wage for RMG workers could serve as a benchmark for other sectors, effectively functioning as a national minimum wage, enabling factories to add value based on workers' skills."

"If implemented, factories could address wage gaps among workers based on skill and experience through internal policies, reducing unrest over wage disparities between grades," he explained.  

Nazma Akhter also voiced her support for the introduction of a national minimum wage across all sectors.  

Defer LDC graduation

Bangladesh has the option to defer its LDC graduation; otherwise, it risks facing significant challenges and losing its current trade benefits, said Mashur Reaz.  

He noted that the country has failed to build the necessary capacity to enhance competitiveness over the past two and a half years, leaving the economy vulnerable to macroeconomic challenges. 

"We need to improve our competitiveness urgently, as Bangladesh has lagged behind by 7 to 8 years in skills and technology adaptation," he explained.  

Citing an example from Fiji, Reaz mentioned that the country reversed its LDC graduation after five years due to economic difficulties.

Highlighting findings from a Japan External Trade Organization survey, he said 61% of Japanese businesses indicated they would cease trading with Bangladesh if duty-free benefits, such as GSP or similar arrangements, were no longer available post-LDC.

He added that exports to the EU may face a minimum 9% duty post-graduation, while competitors like Vietnam will continue to enjoy duty-free access.

Separation of business from politics

Mashur Reaz said there must be a clear separation between business operations and political activities to prevent adverse effects on the business environment. "No one should suffer simply because of their political affiliations."

Mohammad Hatem added that political leaders should not hold leadership positions in trade associations, as this could create challenges for the sector during political transitions.  

Nazma Akter highlighted that some garment owners have politicised the industry by leveraging their positions to gain power to amass wealth in the billions.  

"Using their political connections, they shifted their bank loans to state-owned banks, and some are now in hiding due to corruption or legal charges. This has created significant risks for the industry, as buyers fear placing orders in Bangladesh," she explained.  

She added, "Buyers are concerned about doing business in Bangladesh because individuals they have worked with for over 30 years are now either in jail or in hiding. This raises doubts about the industry's future and stability."

Stop false cases against businesses

Sirajul Islam Azad highlighted that false cases have been filed against BGMEA leaders, including his group's managing director, despite the latter being out of the country at the time of the alleged incidents.  

Mohammad Hatem added that such false cases are forcing some business owners to leave the country, disrupting their day-to-day operations.  

Sumon Kante Singha, general manager of HR and Compliance at Fakir Group, shared that after 5 August, false allegations were filed against the group's board of directors, even though they had no political involvement during the previous government regime. 

"This led to buyers questioning our owners' integrity, which is very unfortunate and damaging to both the company's and the country's reputation," he said.  

He alleged that these cases were orchestrated by groups active in the jhut (garment waste) business, often with political backing.  

Advocate Jafrul Islam Sharif noted that the tripartite agreement addressing the 18-point demand during RMG unrest was a positive step toward normalcy but lacked legal enforceability. "Only two points - increment and night bills - benefit the workers," he added.  

Sharif also warned that the new increased holiday circular might create instability in the RMG sector as it provides no clear guidelines for the private sector.  

Tamim Ahmed, senior research associate at CPD, observed that following the student movement, there is now an opportunity to reduce additional business costs caused by bribes.  

Citing RMG Sustainable Council data, he said timely payment of salaries could resolve 80% of factory-related issues. He further highlighted that 33% of factories, employing 55% of workers, might be impacted by the EU's Corporate Sustainability Due Diligence Directive.  

Ahmed also cautioned that subcontracting factories, which often fail to comply with labour laws and wage board requirements, could face significant challenges after 2026.