Last updated on August 29th, 2024 at 02:49 pm
Dhaka: Bangladesh garment factories, which are projected to account for 90 percent of the country’s exports, resumed operations Wednesday in a bid to rapidly return to full production after violent protests forced a production shutdown that toppled the government of Prime Minister Sheikh Hasina earlier this week.
Prime Minister Sheikh Hasina resigned and fled the country on Monday in the wake of a crackdown on student-led protests that killed some 300 people and injured thousands of others since July.
Garment and textile factories that make for major Western brands such as H&M, Zara and Carrefour were forced to close under curfews.
He noted that H&M-sourcing from some 1,000 factories in Bangladesh-already assured it would not seek discounts due to the delays. The world’s second-largest fashion retailer said its suppliers’ factories were gradually reopening and it welcomed steps for greater stability in Bangladesh.
Outside Urmi Garments in Dhaka, the mainly female employees were back at work operating sewing machines.
Factory manager Emdadul Haq said the factory lost 228,000 pieces of production worth $107,000. In all, Urmi, which supplies to clients including H&M, Japan’s Uniqlo and Britain’s Marks and Spencer, lost about $2.2 million across three units.
Even with the reopening, some of the damage may prove long-lasting in terms of trade. On Monday, Hula Global, an India-based apparel producer for Western clients, said it would be transferring this year’s remaining production from Bangladesh to India as part of its risk-diversification strategy.
Pankaj Tuteja, head of operations at Dragon Sourcing in Mumbai, said major brands like Zara and H&M were likely to remain in Bangladesh, but some firms may not return after looking for alternatives during the unrest.
However, Bangladesh remains attractive because of its lower costs than others by 15-25% and 0% tariffs, Tuteja added.
The International Monetary Fund projects that in the financial year 2024, the ready-made garments industry will take up 90% of Bangladesh’s $55 billion annual exports. According to the World Trade Organization, Bangladesh ranked as the third-largest exporter of clothing globally last year.
Impact on Workers and the Economy
The protests and the associated factory closures have hit workers dependent on daily wages and overtime particularly hard. In such disruptions, many workers, like Razia Begum, become concerned about supporting their families.
Future Trade Outlook
While the opening of factories with immediate effect is a positive omen, the political chaos that preceded this decision carries all the telltale signs of making things difficult for Bangladesh’s long-term trade relations. Competitive pricing and tariff advantages may still be attractive to international buyers; recent turmoil indicates a dire need for sustained political and economic stability.