BGMEA President Atiqul Islam also emphasises domestic preparations to remain competitive in the global market
By Khawaza Main Uddin
President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Atiqul Islam foresees both potential and challenges for the country’s main export-earning readymade garments sector following a few incidents and political unrest. The chief of the apex trade body of the apparel industry called for addressing the situation immediately for the sake of future business. Here is the full text of his interview with ICE Business Times taken on 26 January.
How do you foresee the country’s prospects of business with readymade garments in the aftermath of the recent political turmoil?
At the moment, the situation is bad. The political turmoil has added salt to the injuries of the Tazreen Fashion fire and Rana Plaza that had created a bad image for us across the world. We are suffering from the image crisis and there is likelihood that foreign buyers might lose confidence in us. We also fear that Bangladesh may lose out as a sourcing country for international retailers. What will we do if the apparel business goes to another country in the neighbourhood or some other competitors? This is our major concern, in view of the current situation which is certainly not helpful for promoting exports.
What needs to be done to overcome the crisis and retain the business in Bangladesh?
We have to first give the message that Bangladesh is back to business, not merely normalcy, after a period of political unrest. This message has to be disseminated around the world and in a credible manner. We need to build the confidence of the buyers and retailers that this is the right country, atmosphere is OK and they would remain beneficiaries of our competitiveness. It should be our global campaign to give positive message about Bangladesh. Our first and foremost responsibility is to restore the lost image and bring back the buyers for the sake of our business and future of the nation.
Who will do it?
Definitely it is the government which has to lead the campaign to give a message to the world that ‘Bangladesh is back to business’ and it means business. I think, today’s economic diplomacy is to secure a good image of the country, the sooner the better. To operationalise the policy of restoration of the image and dissemination of the right message, there could be inter-ministry committee with the involvement of the private sector. On our part we will try to regain the image and restore confidence but the primary and more useful work should be done by the government. We also want to see that there is no design to damage the country’s image and that the all-important garment sector is successful.
That means you smell conspiracy. How?
We have no doubt that there are conspiracies and there are efforts to create anarchy in the garment sector. Let us not mix the good efforts to improve the situation and compliance with evil designs. We welcome all efforts including factory inspections to improve working conditions. But we must be cautious of any quarters may try to take advantage of the situation; there are elements which are trying to create unrest in the sector.
Where do you think the competition from other manufacturing countries is coming from?
Which are the countries that’ll be benefited, if we happen to lose business? Primarily it is India and to a lesser extent Pakistan if Islamabad is provided with trade concession in exporting countries, especially European Union (EU). Vietnam, Cambodia, Indonesia and Myanmar will also be benefitted from Bangladesh’s potential market loss. Our advantage was cheap labour which is no longer relevant. For example, the minimum wage is US$69 in Bangladesh as against $71 in India and India’s efficiency level is 92% compared to 72% of ours. We have lost due to exchange rate fluctuation in India where Rupee is devalued against dollar whereas value of Taka has not been depreciated.
Do you foresee any uncertainty in retaining the Generalised System of Preference (GSP) facility while exporting garments to the EU market?
I don’t see any possibility of cancellation of the GSP in EU on the grounds of business atmosphere. Ten years ago, many garment factories had no system of giving appointment cards to the employees and there was no day-care centre. But we have introduced and adopted so many things for the welfare of the workers and improving the working conditions. Our capacity in that area has improved significantly. So, as far as working atmosphere is concerned my understanding is that GSP is not uncertain in EU. But if it is reviewed otherwise (for political reasons), we who are with trade bodies and in business cannot answer to that question. A key challenge at the moment is to give a clear message from the political front in this regard.
What are other challenges? How do you evaluate the responsibility of international buyers?
We have to implement the minimum wage going beyond our capacity and there is no projection on how we will run our businesses viably. It is a challenge being faced by none but us. We can talk about price negotiation and the role of retailers. But practically buyers have no responsibility – they will go where they will get lower prices with quality and consistency. We the Bangladeshi entrepreneurs attained certain confidence by our hard labour and high level of commitment. Our exporters sent garment products worth Tk 9,000 crore by air shipment incurring high costs and even loss just to maintain their commitment. We ourselves have had the experience of three decades and now it is the time to go to the next stage of business.
What, according to you, should be our domestic preparations in order to cope with the challenges?
I feel the urgent necessity of political stability and political commitment to the garment sector. Business may be ruined if we fail to take the right steps. We urge politicians to give us the right atmosphere; we will convince the buyers and make business successful for our collective interests. The issues of importance include peaceful law and order, smooth supply of gas and electricity, improved efficiency of the bureaucracy and better infrastructures – both road and port. It is easily possible to improve the Dhaka-Chittagong highway within six months. The government has to be proactive to help in the garment sector and overall business and investment. The mantra of today’s business facing international competition is to save costs by becoming more efficient and smart.