CPD RMG Study Stitching a better future for Bangladesh
Vulnerability, Resilience and Recovery in Readymade Garment (RMG) Enterprises of Bangladesh
An Assessment of Impact and Implications of the COVID Pandemic
The export-oriented apparels sector of Bangladesh has been struggling to recover from the COVID-19 related challenges. After the dip in export growth during April and May 2020 (m-o-m growth was: -81 per cent and -64 per cent respectively), the performance has been gradually improved in the following months (m-o-m growth in February 2021 was -1.0 per cent). Despite such positive changes, the sector has been still confronting multiple shocks and vulnerabilities. Various steps of resilience and recovery have been undertaken at the enterprise level over the last several months (Moazzem et al., 2020). An important contribution has been made by the government through fiscal and monetary policy measures since the initial phase of the pandemic. In this backdrop, it is important to appreciate how much capacity of resilience and recovery has been gained by the Readymade Garment enterprises. Such an under testing will help understand the possible future path of recovery of these enterprises.
The study features resilience and recovery of the RMG enterprises – an important issue arises to an enterprise in the phase of its transition from the crisis. Since the outbreak of the COVID-19 in March 2020, several studies have been undertaken to focus on different challenges of RMG enterprises and workers.
These include studies on loss of businesses in RMG enterprises (ILO, 2020), level of rebounding of the businesses (Moutray, 2020; Fairlie, 2020), livelihood challenges of RMG workers (Human Rights Watch, 2020) and stimulus package for the RMG enterprises (ILO, 2020). By and large, these studies appreciate the level of shocks and vulnerabilities of the RMG sector during the crisis period. Since the industry has entered the phase of recovery in view of the gradual opening of economic activities across the world, it is important to study the level of resilience and recovery accrued by the enterprises from the COVID crisis.
Against this backdrop, the study has been undertaken to identify the challenges of the RMG enterprises in resilience and recovery from their existing state of vulnerabilities. The study has estimated the level of resilience of recovery during the COVID period compared to that in the post-covid period. Based on the analysis, the study has put forward a set of recommendations with regard to policy and operational issues. The Centre for Policy Dialogue (CPD) has carried out this study in partnership with the Centre for Entrepreneurship Development (CED) of Brac University.
Authors: Khondaker Golam Moazzem, ASM Shamim Alam Shibly and Fahim Subhan Chowdhury
Publication period: July 2021
