Bangladesh Garment Sector Losing $150M a Day as Curfew, Communications Blackout Drag On
Bangladesh’s tentpole garment industry, which accounts for nearly 85 percent of the country’s exports, is suffering losses of $150 million a day amid deadly student protests that have resulted in a nationwide curfew, a telecommunications blackout and the indefinite closure of university campuses, the head of an influential trade group told Al Jazeera on Tuesday.
The South Asian nation has been without mobile or Internet service for the past five days. Coupled with the fact that all factories have remained closed since Saturday as a safety precaution, business owners are concerned that the gradual relaxation of controls as unrest over employment quotas in government jobs appears to be ebbing cannot come quickly enough.
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“The biggest problem is that our international buyers are losing confidence—a loss whose value can’t be gauged with just money as it will have a long-term negative impact on the country’s most valuable industry,” said SM Mannan Kochi, president of the Bangladesh Garment Manufacturers and Exporters Association.
The government said on Tuesday that it would abide by a Supreme Court ruling that 93 percent of state jobs be open to merit-based recruitment, resulting in what authorities have described as a day of “relative calm” following nearly two weeks of clashes between protestors and security forces that killed 150 people and injured more than 1,600 in the major cities of Dhaka and Chittagong.
“The government has acted in line with the Supreme Court verdict,” Anisul Huq, minister for law, justice and parliamentary affairs, told reporters as he waved the official gazette notification in confirmation. “The quota reform is done, now I hope the students will concentrate on their studies,” he added.
That what began as peaceful protests over the reinstatement of a “discriminatory” quota system that reserved 56 percent of state jobs for certain categories of applicants, including the relatives of veterans who fought in Bangladesh’s 1971 war of independence, should escalate so quickly and brutally took many by surprise. It’s possible that Prime Minister Sheikh Hasina’s dismissive attitude to the students’ concerns galvanized something within them. When Hasina questioned why protestors showed “so much resentment toward the freedom fighters” last week, thousands took to the street and set fire to the state broadcaster BTV’s building in Dhaka the next day. They also torched and vandalized numerous police and government buildings, injuring 100 policemen in the process, security forces said.
Police and paramilitary forces, in turn, have fired tear gas and rubber bullets to disperse students who have channeled into the protests broader frustrations over what they see as a shrinking democratic space that furthers Hasina’s autocratic rule.
“They are protesting against the repressive nature of the state,” Mubashar Hasan, an expert on Bangladesh at the University of Oslo, told the Guardian. “Protesters are questioning Hasina’s leadership, accusing her of clinging onto power by force. The students are in fact calling her a dictator.”
The Supreme Court ruling aside, protesting students now say they have a new list of demands, which they want to see fulfilled in 48 hours, though what happens when the clock runs out isn’t clear. Among them are an apology from Hasina for the deaths and the resignation of some government and university officials.
Hasnat Abdullah, a coordinator of the Anti-Discrimination Student Movement, told the Associated Press that demonstrators also want the government to scrap the curfew, withdraw any security officials currently deployed at various universities, reopen the student dormitories and end the “digital crackdown.”
Reuters said that Hasina told business leaders in Dhaka on Monday that her political opponents were to blame for the violence, and that limits would be lifted “whenever the situation gets better.” This would include a relaxation from Wednesday of curfew rules between 10 a.m. and 5 p.m. so people can shop for essentials and the reopening of offices between 11 a.m. and 3 p.m. The Bangladesh Nationalist Party, the ruling Awami League’s main opposition, has denied any involvement in the violence.
Zunaid Ahmed Palak, a junior technology minister, told reporters that repairs were being carried out on communications infrastructure that was vandalized during protests to restore broadband Internet by Tuesday night, Bangladeshi time, though he did not comment on mobile services.
Shuttering Bangladesh’s garment sector for any amount of time is bound to have repercussions for a global supply chain already roiled by shipping disruptions due to Yemeni-Israeli skirmishes in the Red Sea, Munir Mashooqullah, founder of apparel supply chain firm M5 Groupe, told Sourcing Journal. The energy crisis in Bangladesh hasn’t helped, he said.
“Bangladesh prior to the student protests was already suffering from acute energy issues which pushed supplies out by two to four weeks during the crucial back-to-school shipping window,” Mashooqullah said. “The current shipping crisis and longer routes were not helping the retailers to get vessels ETA which could hit stores in time.”
The communications shutdown has been unprecedented in the region, even with the “worst political turmoil and riots,” he noted. The effects of this could exacerbate what has already been a challenging environment for the country’s garment makers.
“What has happened and is happening is that retailers and brands are reassessing their exposure in Bangladesh,” Mashooqullah said. “It is clear that for certain brands, which have more then $200 million a month in FOB from Bangladesh translating into retails sales close to a billion dollars, delays of three to four weeks could severely disturb quarterly earnings and share valuations.”
He said that it’s now “up to the government and the factories to ramp up their capacity and provide the assurance that these events are behind us.”
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