The New Nation - Internet Edition

Syful Islam

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has proposed the government for not allowing setting up of any more new garment factory in next three years, creating mayhem among the possible investors and experts.

Economists termed such proposal illegal and a move to bring monopoly in this business. They said such a move will obstruct new investment and raise number of unemployed people. Business leaders said this is totally contradictory to BGMEA's 'free market economy' culture and against industrialisation.

Last month BGMEA president Anwar-Ul-Alam Chowdhury Parvez in a letter titled 'No more new industry in the RMG sector' to Commerce Adviser Dr Hossain Zillur Rahman requested to stop any further new factory except the extensions of local, foreign and joint ventures.

He said, " Due to the shortage of skilled workers and mid-management personnel almost 25 per cent of factory capacities remain unutilised which is adding to the cost of production. On top of that, shortage of workers leads to uneven workers turnover and migration from factory to factory."

He said due to the high inflation rate income of people living below the poverty line has been eroded by 36.7 per cent meaning the real wages of workers have gone down. On the other hand, export prices of RMG products have been going down over the years. Such a two-way pressure on costs and prices is hitting the base of the RMG industry.

"On this backdrop, the wage level of workers does not commensurate with the desired level of productivity and thus black-holes are created in our competitiveness. So, the biggest challenge we facing is 'how to ensure future growth and stability in the sector," said BGMEA president.

Parvez said "We have been trying to get increased price from the buyers through individual efforts as well as through our association with the international MFA forum. The reality is that customers always insist to ensure compliance of factory level, but whenever we urge for price increase they remain silent.

"Considering all these fact we suggest that no new RMG factory should be permitted to start until our industry capacity is fully utilised which might take 3 years that will help us to build our required skilled workers and mid management," he said.

"We believe this will boost the existing size of the sector to run most efficiently as well as will give an indirect threat to the buyers to increase prices," Parvez added.

"If such step (no new factory) is taken by the government this will bring stability in the industry and would enable to achieve US$18 billion for which we do already have the production capacity," he observed.

Last week at an Iftar Part BGMEA president Parvez said only 5 per cent of the industry of around 4,000 factories fails to pay workers' wages and other social benefits regularly.

Parvez yesterday told The New Nation that the government should keep RMG as discouraged sector for the next three years. "New investments can come in this sector buying licences from the sick or existing factories," he said.

Meanwhile, economists and business leaders of the country has blasted the BGMEA proposal saying that this will create another 'syndicate' of profit mongering businessmen and the trade will go under the control of some people.

BGMEA director and former vice president Abdus Salam Murshedy said new investors should be welcomed in this business. The BMGEA move totally conflicts with free market economy where no business can be controlled.

"BGMEA has no right to bar anyone to come in RMG business," he said adding, this will put negative impact on industrialisation.

SM Fazlul Huq, Former president of BGMEA, said new investment will come with new idea and efficiency.

"Closing up of the doors and windows will not bring any good result for the industry. It is not possible to develop the industry with such illegal move," he said.

Another former president of BGMEA, who is now president of another big trade body, on condition of anonymity strongly criticised the BGMEA's move, which will create obstacles to industrialisation and employment opportunity in the country.

"Country's economy is now facing recession. The government is trying to increase industrial investment. How BGMEA can oppose new investment in RMG sector," he asked.

Criticising BGMEA's move noted economist Prof Abu Ahmed yesterday told The New nation that this move was totally illegal and against the country's law.

"This is not a good argument. BGMEA should not make any curtail," he said adding, there should be no impede on competitiveness.

General Secretary of Bangladesh Economic Association Prof Abul Barkat said there is no ethical or economical argument in BGMEA's hand raising such an issue.

"This move is totally based on monopolistic intention. Not the BGMEA, even the government has no right to regulate industrialisation," he said.

He said the country which has nearly 3 crore unemployed people cannot take any such decision that will halt new investment and consequent upon that no new employment.

BGMEA should train people and utilise them instead of asking for barring industrialisation, the economist observed.