INDEPENDENT UNIVERSITY BANGLADESH

INDIVIDUAL ASSIGNMENT

HRM 390
SEC: 01

NAME : MD MURAD HASSAN

ID : 1431060
Introduction

Unlike the previous pandemics, COVID-19 outbreak puts a heavier burden on the global
and Bangladesh’s economy because of its highly widespread nature in every corner of life.
Lockdowns were imposed worldwide in order to prevent the spread of the virus, which is
the main reason to put the global and domestic economy in turmoil. In this situation, till
now, it is really uncertain about what is going to happen in the future. Even after that, it is
important to trace where the economy is heading. The objective of this literature is to
solely focus on the impacts on the textile sector of Bangladesh, both local and global, and
the relevant export sector. Moreover, this literature is created with the intention of
properly addressing the direct and indirect impacts of the COVID-19 global pandemic on
the Bangladesh economy’s textile industry, widely known as Ready Made Garments (RMG)
industry and its implication, nationwide. Since the textile industry plays a significant role in
GDP contribution, poverty reduction and the total national export share, it is important to
identify the adverse impacts and try our best to help it recover. Even though there are a lot
of talks about diversifying the export basket, which is important, we cannot possibly leave
the textile industry to perish as this industry helps millions of people to make their
livelihoods and its growing opportunities. As there is just no single number that can
explore the whole idea of these impacts, this literature explored a variety of ways to
accumulate data and show how the domestic economy along with the textile sector would
be impacted. The targeted audience for this paper is the general population. I have also
tried to include the direct and indirect impacts of other sectors associated with the impacts
of this targeted sector.

Economic impact of covid 19

Study examines the impact of COVID-19’s impact on the major economic and financial
indicators of the economy of Bangladesh, including production, wages, price levels,
advances, bills, investments, remittances and foreign trade, using the secondary data
published by the Bangladesh Bureau of Statistics , Bangladesh Bank , and the Ministry of
Finance . In addition to the recent impact of the global economic meltdown, Bangladesh
also experienced severe demand contraction in the local economy this exacerbated the
overall economic crisis of the country. Considering the duration and severity of COVID-19,
we examine its impact on major economic and financial indicators of the Bangladesh
economy and recommended policy responses for recovery, based on the analysis. Both
domestic and international demands declined due to the outbreak and subsequent
lockdown, and, thus, producers responded by lowering output to minimize the loss,
especially in the manufacturing sectors. Findings reveal that nominal Wage Rate Index in
the industry and service sectors fell in recent times, which now appear to be recovering..
Prudent measures should include constant monitoring and adapting to the latest
developments in major trading partners and host countries to mitigate the economic losses
caused. Bank credit would play a key role in the ongoing and upcoming recovery process,
as the government has opted for a credit-led stimulus package

Impact of covid 19 into RMG sector

Due to the daily increase in the number of COVID-19 infections in Bangladesh, the declared a
state of lockdown (closure of all public and private offices) in the country from the 26 March
2020, which continued until 16 May 2021. As a result of the lockdown, Bangladesh Garment
Manufacturers and Exporter Association (BGMEA) closed their factories in line with the
government’s lockdown instruction. In addition, clothing shipment processes became
problematic due to the increasing global lockdown impacted by COVID-19, and while demand
for online purchases may have increased, supply chains could not continue to meet demand
given changes to freight options. As a result, 10 million working people, including RMG workers,
returned to their home towns from Dhaka (the capital city of Bangladesh, where the majority of
the garment factories are located) as they would be unable to support themselves in Dhaka
without work. Unfortunately, during the return journey safety measures related to the
prevention of COVID-19 such as maintaining minimum safe social distance from others were
not respected. Huge crowds were reported on buses, ferries and trains without maintaining
personal protection, which represents a serious risk for infection transmission.
The consequences of the COVID-19 pandemic for these RMG workers is dire and include
uncertainty about whether they will be entitled to wages during the COVID-19 pandemic and
related issues such as lack of money for essentials such as food, and concerns about the re-
opening of factories during COVID-19 infection peak times. Other concerns are the health risks
due to lack of preventative measures in the workplace, and the development of mental health
conditions due to the impact of the loss of employment and the fear of contracting COVID-19.

Impact of covid 19 of company (Table)

Bangladesh’s government targets of achieving US$50 billion worth of apparel
exports by 2021 appears to be on the right track. If reached, this target would
represent up to 10% of global apparel exports, up from the approximately 7% of
share
‍

The Ready-made Garment Industry for local market in Bangladesh made a silent revolution
apart from the radical growth on export oriented garment industry. The industry contributed by
covering around 80% of local consumption. The supply of cheap leftover cloths from RMG
factories is the main growth engine fort his industry as the local tailors quickly switch to using
cheap foreign cloths to make apparels which are marketed across the country. Very recently a
large number of small scale industries and workshops were established in different areas of
Bangladesh to supply various industrial produce and meet demands of ever growing capital and
countrywide
Adding to these, once Bangladesh graduates from the Least Developed Country (LDC)
Status, Bangladesh will have to pay 6.7% additional tariff which will result in a loss of USD
$2.7 billion every year.
Global demand for clothing plummeted amid the COVID pandemic and big fashion brands
remain reluctant to place big orders, posing a major problem for Bangladesh's vital textile
industry. In 2020, textile exports from the South Asian nation dropped by nearly 17%.
Shipments to Europe, which is the destination for 60% of Bangladesh's garment exports,
recorded a significant decline of just under 19%. There hasn't been any uptick in demand
and exports so far this year, the Bangladesh Garment Manufacturers and Exporters
Association (BGMEA) said.

Bangladeshi garment suppliers, who were severely hit by the pandemic and cancelled
order by fashion brands, have received US$6.3 million against cancelled orders worth
US$40 million after filing a lawsuit against US clothing giant Sears. Suppliers are expected
to receive US$1.6 million more in the coming months.

Around 3.5 lakh garment workers in Bangladesh lost jobs during the COVID-19 pandemic,
according to a joint survey by the Centre for Policy Dialogue (CPD) and Mapped in
Bangladesh (MiB) that revealed that the practice of safety measures declined in all
categories of readymade garment (RMG) factories while small scale factories observed the
highest drop in such measures.
Prime Minister Sheikh Hasina has announced a total incentive package of Tk72,750 cr to
overcome the possible economic impact on the country due to the outbreak of the novel
coronavirus.“Earlier, I declared a Tk5,000 cr (emergency) incentive package for paying
salaries and allowances of export-oriented industries workers and employees, and today I
am announcing four fresh financial stimulus packages of Tk 67,750 core .With the fresh
allocations, the total amount of financial assistance from the government would stand at Tk
72,750 crore, which is nearly 2.52% of GDP.On March 25, the premier announced a
Tk5,000 crore stimulus package for the export-oriented industries mostly to pay the
salaries and wages of the workers and employees in the sector .
Conclusion
In the COVID-19 outbreak, when the global economy was in turmoil, Bangladesh’s
economy was not an exception. The contractionary impacts of global and domestic
economy, mainly due to lockdowns, are positively correlated with the negative impacts on
the textile sector of Bangladesh. The textile industry is likely to go through a number of
games changing dynamics in its major export destinations, competitive strengths, changing
in demands and supply chain model which may result in new opportunities
References
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7454782/

https://www.dw.com/en/covid-bangladeshs-textile-industry-hit-hard-by-pandemic/a-
56552114

https://www.arabnews.com/node/1658186/world

https://www.aljazeera.com/economy/2020/10/2/thousands-of-jobless-bangladesh-
garment-workers-fear-for-future

https://corona.gov.bd/?gclid=CjwKCAjw7diEBhB-
EiwAskVi1y749PS8ekh1u0SCVvKTVc__oeDZesHVWA1x0omabiaf8GKMLm55nBoCjLYQAv
D_BwE

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