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The Financial Express
Swasti Lankabangla Swasti Lankabangla

Preparing an exit policy for ailing factories

Policy directives to help weather RMG odds

| Updated: August 05, 2020 13:36:51


FE file photo FE file photo

The government has issued a host of policy directives aimed at easing the business process involved in apparel exports in particular.

The move is designed to help the industry cope with possible challenges that the sector might face in the days to come, officials said.

The ministry of commerce (MoC) recently forwarded a memo in this regard to the stakeholders, ministries and departments concerned, requesting steps in line with the directives.

The memo noted the apparel industry has been lately facing various challenges which needed to be addressed by taking proper steps.

Underscoring the need for simplifying the business procedures, it mentioned that it is imperative to reduce the lead time which is a major factor for countries like Bangladesh.

The MoC advised all concerned not to seek unnecessary documents in the cases of external trade and establishment of production units.

It also wanted all the facilities mentioned in the export policy order in place as this might help the apparel industry flourish further.

The ministry also suggested taking initiatives to ensure zero-tariff or low-tariff facility for the apparel sector in the global market after the country's graduation to the developing country status.

It also felt that there should be renewed efforts to lure both local and foreign investments in the readymade garment sector. It also emphasised on building backward linkages for production of artificial and manmade fibres.

Stakeholders have also been requested to go for production of high-value products in line with the ongoing global trend. Searching for unconventional markets is also given emphasis in the directives to enhance the apparel exports.

The central bank has been requested to find out an effective commercial transaction system with Russia and the Commonwealth of Independent States (CIS) countries to increase exports there.

The MoC has also asked for formation of special fund to provide low-cost loans to buy machinery and train people keeping in mind the fourth industrial revolution.

The factory owners have been requested to ensure compliance with the domestic labour law and the standards set by the International Labour Organization (ILO) for the continuation of apparel exports in the global markets.

It is important to put in place an exit policy for the small and medium apparel factories which are failing to run business properly due to facing various adverse effects, the ministry said in its memo.

A senior commerce ministry official told the FE on Wednesday that in addition to old challenges, the Covid-19 pandemic has emerged as serious negative factor for the export-oriented sectors as the demand for goods has declined worldwide.

He said that various pragmatic steps have to be taken to cope up with the challenges during and the post-pandemic era.

"We are looking for ways as to how doing business can be made easier," said the official.

President of Exporters Association of Bangladesh (EAB) Abdus Salam Murshedy told the FE that the country's graduation would deprive the country of many concessions it has been enjoying as an LDC.

"The Covid-9 pandemic has already thrashed the export-oriented sectors and it will leave a long-lasting impact," he said.

The government's policy supports need to be continued to overcome the challenges, he noted.

syful-islam@outlook.com

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