BGMEA Gets New Leader as Bangladesh Looks Ahead
While it comes as little surprise that SM Mannan Kochi was elected president of the powerful Bangladesh Garment Manufacturers and Exporters Association (BGMEA) last week, any change of the guard is notable.
The trade body—which is a prevailing force with its negotiating power that has helped drive the industry to its position as the second largest apparel exporter in the world—has been in the midst of intense campaigning the last few weeks. Faruque Hassan, who has been president for several years helmed the organization an extra year as the Covid pandemic and geo-political issues realigned the world. In addition, Bangladesh went through an economic crisis, with the Bangladesh taka dropping heavily against the dollar, and implementing reforms to meet the terms of the loan from the International Monetary Fund (IMF).
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Analysts who had been predicting the choice of SM Mannan Kochi were surprised, however, that Kochi’s Sammilita Parishad swept the entire lot of 35 positions of directors.
The new board, which will assume office on April 6, named Syed Nazrul Islam as the first vice president and Khandoker Rafiqul Islam as senior vice president.
Siddiqur Rahman, chief election coordinator of Sammilito Parishad, said during the campaign that focus areas would include bringing down bank interest to single digits and working toward a special exchange rate of the dollar for garment exporters, and Kochi himself spoke about plans to prioritize small and medium enterprises, diversifying the market and products, as well as growing the image of the industry.
Contesting from the other side, the Forum party led by Faisal Samad, a former senior vice president of BGMEA, also spelt out specific agendas for the country, which included: growth, diversification, a move towards man-made fibers. Keeping the spirit of entrepreneurship were common goals for both sides.
“Overall, the cost of manufacturing has gone up by 40 percent across the platform, including the price of gas, power, and the higher minimum wage. We have to approach the way this additional cost is factored in, with a review of the financial costs, to see how we can stay competitive,” Samad told Sourcing Journal as campaigning intensified over the last few weeks.
“There is also a need to have a full-hearted conversation with the buyers, and say, ‘Listen, you call it a partnership, and we have strategic alliances in which Bangladesh has delivered post Rana Plaza with compliant factories where millions of dollars have been invested—now it is the time for the buying community to be true partners’. The dialogue with the buyers, and how we can fulfill their requirements better is important, too. BGMEA must facilitate this so that our members are helped at the macro level,” he said.
“Other stakeholders, like unions and development agencies, who are also in partnership and have many other vested areas, need to be in line. The economic recovery plan must be put together with these factors, and along with the academia in the country to find a way forward,” Samad observed.
Hassan, who has been president of BGMEA since April 2021, summed it up best as he observed: “A lot has happened in this time spanning the pandemic,and unprecedented shocks to the global economy, particularly to the garment industry. We actively pursued ‘apparel diplomacy’ over the past two years to secure favorable trade terms like the GSP+ facility through high-level engagements across Europe, America, Canada, United Kingdom, and other key markets,” he said, with the goal of exploring new markets, attracting foreign investment, securing trade benefits, and making strides in sustainability.”
None of it will be easy.
Conditions on labor safety and management are becoming more stringent around the world, with the additional factors of higher sustainability benchmarks and more rigorous traceability requirements.
Manufacturers in Bangladesh told Sourcing Journal that they have invested extensively in safety after the collapse of Rana Plaza in 2013 and believe that it is time to reap dividends on their investments. This focus on safety continues, with the RSC (RMG Sustainability Council) which inherited the mantle of the Bangladesh Accord in June 2020.
The RSC works with more than 1,600 factories, which span more than 2 million workers and 150 brands.
It’s been a difficult year in Bangladesh, highlighted by a conentious general election that saw prime minister Sheikh Hasina re-elected.
With a five-year term in place, Hasina now has a chance to consolidate earlier policies and make new ones that can be assure continuity. It has been clear that her government recognizes the importance of apparel exports for the country, which account for more than 85 percent of the overall exports.
Manufacturers told Sourcing Journal they are looking ahead, with longer planning, armed with less variables than they have navigating.
A loan from the International Monetary Fund is expected to help see the country through its severe economic situation, with the second tranche of the $4.7 billion loan package coming through in December and the third tranche planned for June.
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