The global apparel value chain has experienced an unprecedented disruption in view of the COVID-19 pandemic. Unlike earlier crises, all kinds of activities across the value chain collapsed due to the pandemic, which adversely affected the up-and-down stream including apparel suppliers, workers, raw material suppliers, brands, and consumers, they also said.
The experts added that despite various initiatives at the national level, the process of recovery in the medium term in major supplying countries, including Bangladesh, is rather slow.
More importantly, existing national-level measures have a limited role anyway in ensuring smooth recovery of the apparels enterprises. Addressing medium-term challenges requires innovative strategies and tools to tackle a prolonged period of demand slump.
These observations emerged at a virtual dialogue on “Recovery of the Apparels Sectors from the COVID-19 Crisis: Is a Value Chain based Solution Possible?”, organised by the Centre for Policy Dialogue (CPD) in partnership with Southern Voice.
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Dr Golam Moazzem, Research Director of CPD, delivered the keynote in which he said the lack of initiatives from major market players has kept the suppliers and workers in a state of uncertainty to address the medium-term challenges.
“Major market players, including brands, buyers and governments of sourcing countries, will have to undertake responsible business practices (RBPs) for sustainable recovery. Framework of a value chain based distributive approach is needed to ensure the earliest recovery,” he added.
Dr Rubana Huq, President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), talked about the challenges they faced due to supply chain disruption.
“We have to have a regional collaboration to overcome our challenges. Many people claimed that many workers have been sacked and laid off but why? Our exports drop around 16.94 percent in 2020 compared to previous year. Around 4.82 percent price dropped in September to November in 2020,” Rubana said.
She requested not to be criticized for now as it’s a very challenging time for the industry. They need more financial support to repair the industry.
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“Bangladesh can focus on local demand, as there is a lack of global demand. The small and medium enterprises (SMEs) are financially challenged during this pandemic, and the credit programmes are not reaching these firms,” she added.
The Secretary of Labour and Employment ministry K. M. Abdus Salam opined that sudden retrenchment of workers could be prevented through stronger employment policies. The government is undertaking various social safety programmes like the workers’ welfare fund.
Syed Sultan Uddin Ahmmed, Specialist on Worker Activities at the International Labour Organization (ILO), ACTRAV-South Asia emphasised that focus should also be given to the well-being of workers who are not members of any workers' associations.
Sultan suggested forming a central security fund as a long-term solution for the labours.
Ziaur Rahman, Regional Country Manager of Bangladesh, Pakistan and Ethiopia for Swedish retailer H&M remarked that buyers are committed towards a higher minimum wage of the labours and even contribute to insurance of the labours. “Focus should be given on research and human resource development of the manufacturers,” he added.
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Moderating the session, Distinguished Fellow of CPD Professor Mustafizur Rahman stated that there is a wide group of stakeholders involved in the value chain process. “To sustain the initiatives by the buyers and avoid market failure, a collaborative approach is vital” he suggested taking such collaborative approaches through initiatives like the global entrepreneur compact."
A suggestion of regional response for assisting the supplier and the supply chain came from Chairman of CPD Professor Sobhan. He also proposed a micro-insurance sxheme to ensure the security of the labours. Such social insurance programmes would also require a collaborative approach from the buyers, manufacturers and the government.
Harry Verweij, Ambassador of the Kingdom of the Netherlands agreed to the findings of the study presented and expressed interest in working collaboratively with CPD further in the future.
Commerce minister Tipu Munshi, MP, suggested Bangladesh should look for new markets through product diversification. He also called for a collective effort from the brands, buyers, manufacturers and the government.