Joint IFC and ILO report launching ceremony: E H Latifee, BKMEA asks for holistic and integrated approach for factory remediation

Enamul Hafiz Latifee writes his experience,

It was my pleasure to be present today (i.e., 20 June 2016) at the launch of the joint IFC - International Finance Corporation and International Labour Organization report titled "Remediation Financing in Bangladesh'sReady Made Garment Sector: An Overview" as the delegate of BangladeshKnitwear Manufacturers and Exporters Association-BKMEA in The Westin Dhaka.

The distinguished guests highly applauded my 10-minutes' living speech there, which was as below addressing the issues and proposing possible remedies related to remediation financing (gist only),

"Even though Bangladesh Bank-The CentralBank of Bangladesh, USAID Bangladesh, JICA Bangladesh, IFC, AFD - AgenceFrançaise de Développement and other development partners have opened window for extensive credit facilities and re-financing mechanism have apparently low interest rate, but if someone takes in account-

Firstly, recent price hike of gas by 15% forindustrial units and 100% for captive power producers despite the fact- new gas lines are not available and government could not make it to provide with gas at the existing factories with moderate gas-pressure for which factories cannot utilize their installed production capacity to the optimal point.

Secondly, the fresh increase of source tax by 150% declared in proposed National Budget 2016-17 from 0.6% to 1.5%.

Thirdly, in a similar way there, hiking the Customs Duties of several raw materials used in RMG manufacturing by 60% from 3% to 5%, meanwhile.

Fourthly, targeting this proposed National Budget 2016-17, decrease in the Customs Duties of Fire Extinguisher and Pre-Fabricated Building Materials was proposed by BKMEA, but still Custom Duties are set at very high level- 5%, in a moment when RMG factories have real wants to comply with every aspect of Accord, Alliance and National Initiative for making those more safe.

Fifthly, the ongoing decrease in exported RMG prices at top markets such as in USA and EU by 2.45% and 1.41% respectively.

And

Sixth, the strength gaining of Bangladeshi Taka in exchange with US$ by 7.66% during last year- all these six matters are enough to curtail down the competitiveness next to zero by raising the cost of doing business- the operational cost.

Well, my dear friends, as we can see, if we have financial assistance in form of credits and grants which will be very easy to access and, not by going through so many mediators or institutions- if it can be directly implemented by the relevant associations like BKMEA, moreover, if the interest rate can be managed below 5% and refinancing mechanisms are well taken for the factories who have already complied with 30%-40% fire, structural and electrical international safety standards, then it would mean a real support to the RMG sector of Bangladesh for continuing the remediation and enhancing the respective technical assistance."

However, one of the very pleasing moments from there was to meet Sir Faruque Hassan, Senior Vice President, BangladeshGarment Manufacturers and Exporters Association (BGMEA), I was really amazed of his heartfelt cordiality toward me.