TITLE:
Impacts of COVID-19 on the Garment Sector of Bangladesh
AUTHORS:
Md. Sharif Hossain, Shah Alam
KEYWORDS:
COVID-19 Outbreak, GDP, Total Export Values, Sales Revenue of the Garment Sector, Remittance Inflows, Employment in the Garment Sector, Unemployment Rate and Econometric Techniques
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.12 No.3,
March
31,
2022
ABSTRACT: In this
study, the principal purpose has been made to investigate the impacts of
COVID-19 outbreak on the garment sector of Bangladesh including Bangladesh
economy using the modern econometric techniques. For this study, the time
series variables GDP, total export values (TEX), sales revenue of the garment
sector (REVGS), employment in the garment sector (EMP), remittance inflows
(REM) and unemployment rate (UNR) of Bangladesh are used in order to find the
impacts of COVID-19 outbreak. In this paper, the impacts of COVID-19 outbreak
are predicted using the Holt-Winters’ seasonal additive method for all
variables individually for the years 2020 and 2021 and then for each and every
variable the future values are forecasted. From the predicted results it is found that the loss of GDP, TEX, REVGS, and REM are $31,677.475
million, $6771.5296 million, $6854.089 million and $3941.4486
million in the year 2020 and in the year 2021 it will be $13,544.415 million,
$3044.7328 million, $2026.187 million, and $934.513 million respectively for
the country wide lockdown due to COVID-19 outbreak. In terms of percentage, the loss of
these variables is 13.973%, 13.9726%, 21.789% and 21.650% in the year 2020 and 6.945%, 7.303%, 6.395% and 5.826% in the year
2021 respectively. From the forecasted values the declining trend is found for
the variable sales revenue of the garment sector (REVGS) and will be continued
for a long period of time. The long-lasting declining trend of REVGS is a red
alarming for the garment sector as well as for the Bangladesh economy.
Therefore all the stakeholders including BGMEA, BKMEA, and Bangladesh
government have to take necessary steps from now to overcome the problem. From
the predicted values it is found that in the garment sector the growths of
employment are negative by -1.442% and -10.406% in the years 2020 and 2021 respectively. During the period of
COVID-19 more than 348 garment factories have shut-down and 0.4 million garment
workers lost their jobs. It is found that unemployment rate is upswing by
58.234% in the year 2020 and then will fall back by 18.72% in the year 2021,
but from 2022 again increases returning to moderate levels with an increasing
rate of 2.47% and will be continued for a long period of time due to COVID-19
outbreak. The long-lasting increases in unemployment rate will cause adverse
effects on socio-economic conditions including the livelihood of the marginal
people. During the period of COVID-19, unexpected outcomes such as reported women are being raped and suicide may adversely affect the mental health status of
the garment female workers for future. Thus from the predicted values, the
following policies should be implemented to tackle the problem of sales
revenue, to improve the employment condition in garment sector and also to
improve unemployment conditions in Bangladesh. The garment sector should
develop and maintain good relationships with the international buyers and
related stakeholders and have to negotiate with them regarding the price of the
products. Price reduction policy with maintaining the quality of the products should be
implemented for which the global demand will be increased as a result sales
revenue of the garment sector will be increased. Emphasize should be given to
provide tax benefits, to advance livelihoods programming for vulnerable workers,
to formalize a centralized government database for the garment sector, to
expand social protection programs for all garment workers, including
unemployment benefits and housing and to rebuild trust between buyers,
employers and workers. Monetary motivation and minimum risk premium policy
should be introduced for which the garment workers can work with full
enthusiasm. Collaboration between government and garment sector including other
sectors should be developed to keep people employed and train them. Well-designed database can be created for matching job
seekers and employers. Upskilling or reskilling the individual in
conformance with the need of future driven skill trend. Enhancing digital
literacy that will help the workers to find
job in rapidly changing labor market. Entrepreneurs should be encouraged
and different stimulus packages should be allocated and emphasize should be
given for proper management of these packages so that there will be no scope of
wastage money, as a result money can be used for right purposes. These policies
will play significant roles for
future development of the garment sector as well as for Bangladesh economy.