Govt takes a hard-line on RMG incentives
Bdnews24.com . Dhaka
The government has again taken a hard-line on providing financial incentive package to apparel sector seeking funds to bounce from a downturn induced by global meltdown.
‘It is not right that it will not be the end of the world if a child cries.
The government will have to consider about all sectors,’ AMA Muhith told the news agency on Monday when he was asked whether the readymade garment sector would get the assistance.
‘Those sectors will come under incentive package that have been really affected by economic recession,’ Muhith said at the secretariat.
A committee, formed on the RMG sector with former finance minister M Saiduzzaman as the head, is set to meet today. The government will act on the recommendations of committee, the minister said. The industry’s top trade body, Bangladesh Garments Manufacturers and Exporters’ Association, at a media briefing on Sunday said they saw a 30 per cent dip in spot orders from buyers at this year’s BATEXPO, the country’s largest apparel fair.
Spot orders at last year’s expo amounted to $55.45 million; this year they totalled just $41.64 million, BGMEA president Abdus Salam Murshedy said.
Murshedy sought assistance from the government under incentive package. Opposition chief Khaleda Zia at the closing ceremony of BATEXPO also urged the government to give a portion of the financial stimulus package to the apparel sector.
But, minister Muhith said: ‘This is not a serious matter. The rise and decline of export in a sector is very natural.‘We should not think that everything will be over if a sector suffers less export.’
In April, the government rolled out a stimulus package of Tk 3,424 crore. However, the two major trade bodies of the garments industry, the BGMEA and Bangladesh Knitwear Manufacturers and Exporters Association, were highly critical as the highest export-earning RMG sector was excluded altogether from the proposed package.
The two trade bodies later welcomed the revised Tk 5,000 crore package included in the FY 2009-10 budget, although they again expressed concern that the RMG sector still received no specific allocation.
On September 3, Murshedy said the sector required its own financial package of Tk 3,000 crore by September 7 to salvage the industry and help clear worker wages and allowances ahead of Eid-ul-Fitr.
The ultimatum was widely criticised by the government, workers, unions and even other business organisations. Muhith had rejected the demand, saying it was not right for the industry leaders to link the issue of financial support with worker dues ahead of Eid.
The BGMEA later issued an apology for their request, saying ‘mistakes in language’ and ‘frustration deriving from the global recession’ had prompted their appeal. BKMEA president M Fazlul Hoque said they did not expect much from today’s meeting.
He told the agency on Monday: ‘We are frustrated. The government is not admitting that the garment sector has been affected by recession.’
According to Export Processing Bureau data given on Sunday, export in knitwear sector had dropped by 27 per cent in September compared to the same period of the last year and fell 9 per cent in the first quarter of the current fiscal year.
‘This proves that the impact of global recession have hit us. To get over the loss we are seeking assistance in the form of incentive from the government,’ the BKMEA chief explained.
To tackle the global recession the government formed a taskforce in April with the representatives of public and private sectors and economists and researchers, with the finance minister heading. The taskforce held its first meeting on April 19. The government based the Tk 3,500 crore incentive package on the recommendations of the taskforce. The taskforce in its second meeting on September 16 decided to form a committee to deal with the recession.
The nine-member committee was formed on September 21 with former finance minister M Saiduzzaman. The committee is scheduled to hold a meeting at 10:30am today at the finance ministry.