Over 10,000 RMG workers terminated in a year
Abu Sazzad: The poverty reduction and steady growth of the country is hampering for job termination from RMG sector. At the same time, the job losing of migrant workers became a serious threat for attaining a vibrant economy, said experts.
Such scenario is also applicable for the corporate, banking sector and almost every sector in Bangladesh, they observed. If such trend continues, the country would fail to achieve the targeted GDP growth of the country, they lamented. GDP growth rate has been projected at 8.2 percent for FY2019-20.
Stakeholders said, they are forcing to cut the job to minise the production cost. They are failing to expand their existing business for higher lending rate and increased cost of doing business. The large stakeholders are struggling to operate their existing business despite ensuring several logistic and policy support of the government. They claimed policy support is not enough to compete in the international market.
Meanwhile, the introducing of automation in the RMG sector has increased the production resulting job termination of the workers. So far, in the current year, over 10,000 jobs are reportedly lost already from the RMG sector for introducing the automation of the sector which is a threat for reducing poverty rate in the country.
According to the World Bank (WB) and the International Labour Organization (ILO) around 10,000 workers from different levels have lost their jobs in the recent years.
On the other hand, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) sources admitted to the job cuts, saying that WB and ILO’s figure is not totally correct. Around 4-5 thousand workers, including mid-level executives, have lost jobs for automation of the RMG factories and other reasons.
Meanwhile, country’s poverty rate came down at 21.8 per cent while the poverty rate, as per the lower poverty line or people living in extreme poverty, came down to 11.3 percent in 2018, according to the latest data of the Bangladesh Bureau of Statistics (BBS).
According to Global Economist Forum (GEF), Bangladesh needs zero poverty rate to attain a mid-status country by 2030. Considering this, the job cutting from the RMG sector and migrant workers send bank are posing threat to the economy, said a source of the global forum.
At the same time, thousand of Bangladesh workers are forcing to back Bangladesh in the recent years for lack of legal documents which have already posed a threat to earn remittance from abroad.
Sources said around 12,000 workers were terminated during the movement for wage hike in December and January. After implementation of the new wage structure about 10,000 more workers were fired, he added.
Bangladesh Garment Manufacturers and Exporters Association vice-president SM Mannan Kochi told the Daily Industry the many owners couldn’t run their factories due to increased operational costs. He has underscored the need for allowing more cash incentives from the government to save the apparel industry.
According to a report, prepared by the Policy Research Institute, export-oriented industries enjoyed tax exemption of Tk 34,880 crore on the import of raw materials in the 2016-2017 financial year under the bonded warehouse facility. Of the amount, the apparel sector alone enjoyed Tk 33,612 crore in duty cuts against the import of inputs such as fabrics, yarn and accessories worth Tk 47,795 crore, as per the report published in December 2017.
Industry insiders said, the local manufacturers are spending millions of dollars to purchase modern machinery every year, said Abdul Kader Khan, president of the Bangladesh Garments Accessories and Packaging Manufacturers and Exporters’ Association (BGAPMEA).
Almost 100 new factories are coming up every year fully equipped with new technology and compliance with factory norms. He said around 250 factories have been using modern machines and technology to meet international demands.
State-of-the-art equipment helps reduce the production cost by 30-40 per cent and raises productivity, he mentioned.
Factory owners have invested huge sums in automation-partly under compulsion amid campaigns by western buyers’ lobbies for remediation of factories following some workplace tragedies and partly for building up eco-friendly modern industries which weighed down on their capability and thus stifled new employment generation.
In a recent development, Bangladeshi apparel makers have moved to reduce cost by cutting jobs in the mid-level management and to some extent workers. This is because of the rise in production costs due to adopting new technologies, implementation of new wage structure, which came into effect from December last year.
The makers are making a huge amount of investment in automation, which posed a threat to the new employment generation in the $31 billion apparel sector. Since its journey in 1978, the sector now employs about 4.4 million workers mostly women.
According to a ILO report on Textile and Clothing Sector in ASEAN states that the textile, clothing and footwear sector is at the highest risk of losing jobs due to automation.
The present status of Bangladesh’s apparel sector in a small scale reflects the voice of the World Bank and ILO regarding the use of technology in production.
In the given situation, panic gripped the mid-level managers and staffs, which impacting the productivity of the workers hurting the employers.
“There is growing concern that the new technologies could lead widespread job losses, a countervailing force is at work across the Asian region. And the arrival of new technologies to cause a 17 percent decline of the labor force in the region,” according to ADB.
Experts stressed on skilling more mid-level managers so that they can take the lead in increasing productivity and produce value-added goods to avoid the impact of new technology up-gradation.
Besides, there is an important role from the government, which can help in making the mid-level managers and staffs more capable to remain in the jobs with training, they said adding the government has an important role to play in the leveraging technological advances for inclusive growth.
Meanwhile, top management of apparel makers opined that workers education level and better training could be a safeguard against automation.
“In Bangladesh context, the education level of apparel workers is very low, while there is a lack of graduates in relevant fields. These are barriers in making them capable of new technology,” said Mohammad Hasan Executive Director of Babylon group.
While there is a lack of proper training in making the staff capable of new technology, if these two things can be ensuring, there is no risk of losing jobs, he added.
Economists said job termination including local and foreign are a serious threat to consider the present economical situation of the country. Private sector is the engine of growth but they are failing to generate more employment because of high operating cost. Instead of generating employment, the stakeholders are terminating their existing employers to sustain their business which is not a good indication for the economy of the country, they pointed out.