What the papers say

The Future of Bangladesh’s Garment Sector

A weekly round up of articles about employment, the labour market, skills training and workforce development. This week’s round up is drawn from The Daily Star. Here is the news for the week ending 26th March 2021.

This Week in the Bangladesh English News…

…Data reveals which groups constitute the new poor. Meanwhile, Bangladesh is increasing rural investment through Money for Work. McKinsey & Company published an article about “What’s next?” And we know the MRT lines are under construction – but could Dhaka get a subway system too?

Education and Labour Market

Among the “new poor” some 50 percent are from the service sector according to The South Asian Network on Economic Modeling (SANEM). The most represented are small business owners and drivers.  “The people employed in the urban service sectors, in particular, were badly hit. A majority of the jobs in the urban service sector are informal and there is little job security,” said Dr. Selim Raihan, executive director of SANEM. This data comes from the surveys done in November and December 2020, which also found that the poverty rate doubled in the last two years. It was 42 percent among the cohort of about 5,500 households, and 21.6 percent among the same cohort in 2018. The last time the poverty rate was measured at this level was 2005.

The government allocated more funds to the Money for Work programmes, formerly known as Food for Work programmes. Infused with about 80 percent more cash, these programmes aim to improve rural roads and other infrastructure and put money in the hands of the rural poor. The new money will be divided evenly among the subdistricts, and some of the money will also go to Test Relief programmes. Within the last year, the government has switched from food to cash aid as the country’s food reserve has decreased.

Bangladesh will create a six-year plan for ensuring labour rights and safe working spaces, said Law Minister Anisul Huq. The plan will be prepared to comply with the demands associated with Least Developed Country (LDC) status graduation. Minister Huq spoke about the plan and called for cooperation before a session of the International Labour Organisation’s (ILO) governing body. The ILO body’s chairperson and India’s Labour Secretary Apurva Chandra presided over the session.

Financial Services

Last week, the government formed the Bangladesh Infrastructure Development Fund (BIDF) to lend to select infrastructure projects. This week, it became clear just how fiscally conservative lending will be: according to BIDF, no more than $2 billion can be dispersed in a year, and reserves must cover import expenditures for six months. Imports declined last year, but imports started rising again in January and with January’s import expenditure of $7.23 billion, the reserves only have 5.94 months of funds to cover import expenditures. This week, the finance minister responded to the questions about lending to the private sector from the reserves. He answered that “no such policy has been made” but work needs to be done in this new area.

Business, Investments, Trade and Growth

McKinsey & Company surveyed the top 10 apparel sourcing companies about the future of the Bangladesh garment sector. Apparel executives suggested innovation, upgrades, and diversity and investments in flexibility, sustainability, worker welfare and infrastructure. One sourcing executive said, “Speed is becoming more important, but only a minority of suppliers in Bangladesh understand that.” The report also praised Bangladesh for its decade of rapid growth and action on worker and workplace safety.

The Bangladesh Bridge Authority and consultants presented a plan to build an underground railway in Dhaka. The feasibility study and design proposes 11 subway routes, built in three phases over a 50-year period, for an approximate cost of $8 billion. Some experts were skeptical: For one, the subway system would compete with the ongoing MRT project, which is already under construction with six lines set to be complete in 2030. And a subway system was not proposed in the revised strategic transport plan for Dhaka approved in 2015.

Agriculture and Growth

Rice cultivation has increased according to the Department of Agricultural Extension (DAE). Farmers dedicated 3 percent more acreage to rice – in some cases, replacing maize and wheat – as rice prices remain high. “There may be a dispute about the actual acreage, but it is true that farmers have cultivated the grains on a higher area of land after Aman rice production dropped for floods,” said Jahangir Alam, an agricultural economist. Aman rice varieties provide the second-largest yield in Bangladesh. It’s now the Boro rice season, which yields the most abundant varieties of rice. This year, farmers increased their use of hybrid seeds. The government encouraged hybrid planting with financial support and provision of seeds.

Other News

Tragedy struck the world’s largest refugee camp, the Balukhali refugee camp in Cox’s Bazar. On Monday, a fire in the camp damaged and destroyed some 10,000 shelters, affecting some 45,000 Rohingya refugees. The UNHCR further said that 15 people were confirmed dead, and hundreds were injured or missing in the aftermath. Witnesses to the event reported the fire was fed by gas cylinders distributed throughout the camp for household use.

The morning of 17 March, tragedy also struck Sunamganj district’s Noagaon village when supporters of a political Islamist group attacked, vandalized and looted some 90 Hindu homes. “They found me… they tried to hit my head, but missed and cracked my arm. Then they held a knife to my throat and took away my jewelleries and savings,” said one resident. Since Wednesday, 33 people have been arrested in connection with the attack. A Facebook post criticizing one political leader’s statements sparked the violence, and the man who made this post has also been arrested by police. The local administration has provided victims of the attacks money, corrugated iron sheets and rice.