The country’s apparel exporters have demanded a stimulus package from the Bangladesh Bank, including loan rescheduling facility and compensation against the value of dollar on retained value, to enhance competitiveness of the sector in the global market and to protect the interests of small and medium scale factories at home. Bangladesh Garment Manufacturers and Exporters’ Association president Rubana Huq submitted the set of demands during a meeting with Bangladesh Bank governor Fazle Kabir on October 7. Citing the recent negative export earnings growth and fall in prices of RMG products in the global market, Rubana demanded loan rescheduling facilities with a provision of 2 per cent down payment for factories which were not habitual defaulters. In the proposal submitted, the BGMEA demanded compensation for the sector through additional provision of Tk 2-5 against each dollar on the value they retained, saying that the general policy of the government was not to favour devaluation considering possible negative impacts on import price, inflation and balance of payment. The trade body demanded that a maximum interest rate for packing credit should be fixed and higher advance payment for defined category should be allowed. The BGMEA also demanded reduction of the interest rate on EDF fund to LIBOR plus 1.5 per cent from the existing LIBOR plus 2.5 per cent and allowance of working capital loan in dollar as export proceeds were obtained in dollar. Rubana requested the Bangladesh Bank to establish a specific definition to distinguish between bad and good borrowers in order to protect the business of operational factories. She said in her proposal that the readymade garment sector faced tough competition in the global market and was losing its competitiveness due to a number of local and international challenges, including fall in product prices by 1.61 per cent in the global market, strong local currency against the dollar, dependency on cotton made items and lack of innovation and diversification. The BGMEA president also urged the central bank to introduce special finance schemes to facilitate technological up-scaling in the RMG sector and to write off outstanding credits, interest, cost of funds and all charges of 158 sick RMG factories. BB executive director and spokesperson Serajul Islam on Saturday told New Age that the proposals made by the BGMEA had been discussed in the BB’s internal meetings. He, however, could not confirm the outcome of the meetings immediately. When asked, Rubana said that she had explained the real situation of the RMG sector and demanded some support from the BB so that the sector could overcome local and external challenges to sustain its competitiveness. She said that value addition of the garment industry had declined by 1.61 per cent in last four years and a total of 59 factories had closed during the January-September period this year, leaving 29,700 workers jobless. Rubana said that the BGMEA had demanded loan rescheduling facility only for small and medium factories, not for any large scale industry. ‘We have requested the BB to provide support for local and foreign investments in man made fibre based yarn or fabric manufacturing as the sector needs to shift to MMF base production from cotton base for value addition,’ Rubana added.
