The Bangladesh Government would be providing a stimulus package to the crisis-hit apparel industry in order to increase its production capacity and offset the losses suffered by the sector due to political instability in the country, said Finance Minister AMA Muhith during a meeting with a business delegation comprising of readymade garment (RMG), knitwear and textile leaders at the Ministry’s Secretariat office in Dhaka.
The Finance Minister said the Government would be giving a stimulus package to the RMG firms that have suffered huge losses to increase their competitiveness, and a decision on this would be announced by the end of December, 2013.
During the meeting, Mr. Muhith informed the business delegation that the central bank’s loan policy will most likely be relaxed by this month for the apparel manufacturers in the country.
The move came in response to the demands from garment manufacturers and exporters in Bangladesh who stated that the current loan classification policy, which marks a loan to be classified when the repayment period is overshot by three months, is putting excessive pressure on them to make their payments.
At the meeting, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Atiqul Islam, presented a three-point demand on behalf of garment manufacturers to make up for the excess cost incurred by them following the latest hike in wages, as well as another eight-point demand to compensate the losses suffered due to political unrest.
The demands included banking support and special loans, reduction of tax on export earnings, two-year exemption from classifying loans of textile, garment and backward linkages, financial incentives to explore new markets and more.
Mr. Atiqul Islam said the enhanced wages for garment workers coupled with political instability in the country has distressed the Bangladesh apparel sector, and the industry would require financial as well as banking support from the Government to overcome the losses.
The president of Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Kazi Akram Uddin Ahmed, president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) AKM Salim Osman and president of Bangladesh Textile Mills Association (BTMA) Jahangir Alamin as well as representatives from Bangladesh Bank were also present at the meeting.