The European Union plans a €90 million grant for one million Bangladeshi readymade garments workers for the next three months who have either been laid off or will lose their job permanently due to coronavirus pandemic.
In the first phase each worker will get monthly Tk3000 cash support for three months- June to August when Bangladeshi factories might experience order shortage for demand shrinkage in the western markets. Possibly the grant will be extended for a second three-month phase further.
Dr. Gauranga Chandra Mohanta, additional secretary and the Europe wing chief of the Economic Relation Division said “we are in discussion and hope things will be settled shortly”.
The total size of the grant may increase further to €500 million, said Fazlee Shamim Ehsan, a director of BKMEA who attended the discussion.
Leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), and workers’ representatives also confirmed the news.
According to the grant the EU will give total Tk900 crore for first 3 months phase (Tk3,000 each to 10 lakh workers, the amount will be Tk300 crore a month) and it will be deposited to the mobile banking accounts of the jobless workers. Apparel makers will share workers’ database with EU team to identify those are losing their jobs. Several meeting among the EU’s Bangladesh office, labour representatives, the BGMEA and the BKMEA has already taken places.
According to the sources, the European Union planned to pay the affected RMG workers from May to September. But apparel exporters suggested to shift the plan to July-December period as Bangladesh government had taken Tk5,000 crore stimulus package to pay the RMG worker at the time.
“We have discussed the payment issue with the EU team. They want to pay the workers who have already been laid off or will lose their jobs during the pandemic,” said BKMEA Director Fazlee Shamim Ehsan.
According to the BGMEA, more than a million RMG workers will be jobless due to this pandemic because over a thousand garment factories have already suffered about $2.97 billion worth of order cancellation and withdrawals by international brands and retailers.
Rubana Huq, president of BGMEA, said “as the Covid-19 crisis unfolds, we all have realised that we need an unemployment scheme for the workers. Everyone needs to come up with a collaborative plan to support the workers who will, most unfortunately, lose their jobs.”
She also opined that the impact of Covid-19 will go on till at least Spring 2021 as shoppers will buy less. Moreover with capacity reduction at 50 percent across the industry, the factories will continue to resize and reconstruct. So a collective government to government (G2G) initiative involving all sourcing countries must begin.
On the other hand labour leaders said many factories have been terminating workers claiming that they did not have work orders.
Nazma Akhter, president of the Sommilito Garments Sramik Federation said, factory owners are terminating workers under several sections of the labour law showing that they have no available work orders.
She also urged other buying countries to pay workers during the pandemic, as all buyers and brands have a responsibility for them.
According to industry sources, 419 RMG factories have already shut down due to a lack of orders and cancellations by international brands and retailers. Some of them went for permanent closure because of the pandemic.
In April, the EU announced a €5 million cash support to garment workers in Myanmar.