Bangladesh Garment Factories Reopen Following Sheikh Hasina's Ouster

Photo : AFP

Dhaka – Garment factories in Bangladesh, a sector crucial to the country's economy, have reopened after being shuttered due to violent protests and political upheaval that led to the ouster of Prime Minister Sheikh Hasina. The reopening comes as the garment industry, which represents a significant portion of Bangladesh's exports, aims to return to full operational capacity.

Last week, Sheikh Hasina resigned and fled the country amid a brutal crackdown on student-led protests that began in July. The violence, which resulted in the deaths of around 300 people and left thousands injured, prompted the imposition of curfews that disrupted production in the garment sector.

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Bangladesh's garment industry, which accounts for an estimated 90% of the nation's exports, had to halt operations under these curfews. The sector supplies major Western brands such as H&M, Zara, and Carrefour. Despite the disruptions, Miran Ali, vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), expressed optimism about a swift return to normalcy. "We lost a total of four days. It’s too early to estimate the loss, but there was minimal physical damage to factories," Ali told Reuters. He expressed confidence that the situation would stabilize soon and reassured that buyers would continue their support.

H&M, one of the largest buyers from Bangladesh, has indicated that it will not seek discounts despite the delays. The company confirmed that its suppliers' factories are gradually resuming operations and welcomed the steps taken to restore stability in the country. H&M sources from approximately 1,000 factories in Bangladesh.

At Urmi Garments, a major apparel manufacturer in Dhaka, workers have returned to their posts. Razia Begum, a 38-year-old employee, stressed the importance of resuming work to support her family, stating, "We are poor people depending on daily wages and overtime. If we stay home, how can we run our families?" Factory manager Emdadul Haq reported that Urmi Garments had incurred a loss of 228,000 pieces of production, valued at $107,000, with total losses amounting to about $2.2 million across its three units.

While factories are reopening, the sector might still face challenges. Hula Global, an Indian apparel producer, announced it would redirect production from Bangladesh to India for the remainder of the year to mitigate risks. Pankaj Tuteja, head of operations at Dragon Sourcing, highlighted that while major brands like Zara and H&M are likely to remain committed to Bangladesh, some firms might seek alternatives due to the recent instability. "Even with political stability, there could be long-term impacts as firms weigh their investment in Bangladesh," Tuteja noted.

Despite these concerns, Bangladesh remains an attractive option for apparel manufacturing due to its lower costs—15-25% less than other regions—and zero tariffs. The International Monetary Fund (IMF) projects that the ready-made garments industry will account for 90% of Bangladesh's $55 billion annual exports for the financial year 2024. Last year, Bangladesh was the world's third-largest exporter of clothing, according to the World Trade Organization.