Economy
BGMEA Urges Govt to Sustain Policy Support for Garment Industry Amid Global Challenges
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has called on the government to persist in providing policy support to uphold the competitiveness of the ready-made garment industry amidst global economic challenges.
During a meeting at the Secretariat in Dhaka on Sunday (4 February), a delegation led by BGMEA President Faruque Hassan conveyed this message to Finance Minister Abul Hassan Mahmood Ali, according to a press release.
The delegation, including former BGMEA president Md Siddiqur Rahman, BGMEA Senior Vice President SM Mannan (Kochi), Bangladesh Textile Mills Association (BTMA) President Mohammad Ali Khokon, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Executive President Mohammad Hatem, and Federation of Bangladesh Chambers of Commerce & Industries (FBCCI) Vice President Md Munir Hossain, met with Commerce Ministry Senior Secretary Tapan Kanti Ghosh and Finance Division Secretary Md Khairuzzaman Mozumder.
Expressing congratulations to Finance Minister Abul Hassan Mahmood Ali for taking on the responsibilities of this crucial ministry, the meeting primarily addressed the urgent issues faced by Bangladesh’s ready-made garment industry.
Discussions centered around the impact of the global economic situation on the RMG industry, LDC graduation, and its consequences for Bangladesh’s trade.
BGMEA President Faruque Hassan outlined the significant challenges affecting the RMG industry, citing the repercussions of the Russia-Ukraine war, which has led to considerable inflation in the United States and European Union countries. This inflation has resulted in a decrease in apparel exports to key markets for Bangladesh.
Highlighting that a decline in garment exports would adversely affect Bangladesh’s foreign reserves, as the RMG industry constitutes 84% of the country’s total export earnings, he also noted the industry’s efforts to implement a new minimum wage for garment workers amid escalating energy and raw material prices.
In this demanding environment, the sudden government decision to reduce cash incentives for garment shipments and other export-oriented products is anticipated to negatively impact exports and the overall economy, Faruque Hassan asserted.
BGMEA President Faruque Hassan urged the government to reconsider this decision and maintain the previously established policy support through cash incentives.
Finance Minister Abul Hassan Mahmood Ali reassured the delegation that the government would thoroughly examine the issue of cash incentives to provide support to the RMG industry.
During the eleventh month of the current fiscal year, the country’s foreign currency reserves have fallen below $19 billion for the first time. After paying off some import bills, the reserves have now stood at $18.26 billion on Sunday.
According to the International Monetary Fund (IMF), as of May 8, the total foreign currency reserves of the country were $19.82 billion.
Mohammad Mezbauul Haque, the spokesperson of Bangladesh Bank, informed that through the Asian Clearing Union (ACU), the central bank has paid off import bills totaling $1.63 billion over the past two months.
However, Bangladesh Bank maintains that after paying off the import bills, the foreign currency reserves now stand at $23.71 billion.
According to the Central Bank’s accounts, the reserves were $25.27 billion on May 8.
The Dhaka Stock Exchange (DSE) and the DSE Brokers Association (DBA) have expressed gratitude towards Prime Minister Sheikh Hasina for her directive to list government companies in the capital market, a move hailed as timely and positive.
The directive was issued during the recent meeting of the Executive Committee of the National Economic Council (Ecnec) last Thursday.
Dr. Hafiz Muhammad Hasan Babu, Chairman of DSE, described the directive as a significant step towards enhancing the dynamics of the capital market. He emphasized that besides invigorating the capital market, this move would also attract foreign investment and promote sustainable development.
Despite previous efforts, government institutions had not been listed in the stock exchange, according to a notification issued by the DSE. The Prime Minister’s directive is seen as a pivotal step towards revitalizing and expanding the economy.
Dr. Babu further remarked, “The listing of reputable companies in the capital market, as directed by the Prime Minister, will greatly benefit the country’s economy. It will also enhance investor confidence.”
Similarly, the DBA released a notification applauding the Prime Minister’s directive, terming it as positive and timely for the capital market.
Saiful Islam, President of DBA, expressed optimism about the directive’s potential to accelerate the country’s capital market and overall economy. He pledged support to relevant government departments and regulatory bodies in implementing the directive, ensuring its positive impact on the economy, including the capital market.
India has expressed interest in financing Bangladesh’s Teesta project, announced Foreign Minister Hasan Mahmud. Speaking to reporters after a meeting with Indian Foreign Secretary Vinay Mohan Kwatra, Mahmud stressed the importance of aligning the project with Bangladesh’s needs. He confirmed discussions on the Teesta issue during the meeting. Mahmud also affirmed Prime Minister Sheikh Hasina’s upcoming visit to New Delhi, indicating that the finalization of the date would depend on the formation of the new Indian government following ongoing elections.
Meanwhile, the IMF has approved a $1.15 billion staff-level loan for Bangladesh in its third tranche. Mahmud noted the ongoing elections in India and the subsequent formation of the new government as factors influencing the scheduling of PM Hasina’s visit.
When asked about the sequence of visits to India and China, Mahmud suggested Delhi’s geographical proximity to Bangladesh. Diplomatic sources suggest PM Hasina’s visit to India is planned for early July, following India’s elections.
Pre-election surveys indicate strong prospects for Indian Prime Minister Narendra Modi’s re-election. Modi previously congratulated PM Hasina on her electoral victory in January, expressing optimism about strengthening ties between the two nations.
The last bilateral engagement between the prime ministers occurred during the G-20 Leaders Summit in September 2023. Modi is expected to invite South Asian and BIMSTEC leaders to his swearing-in ceremony, fostering regional cooperation.
Addressing border killings, Mahmud emphasized the government’s commitment to ending such incidents and promoting the use of non-lethal weapons by border forces. Discussions also covered enhancing physical and people-to-people connectivity, including cooperation with India to import hydropower from Nepal and Bhutan through India. Mahmud highlighted the need to further ease visa restrictions to strengthen people-to-people relations.
