The recent unrest over the quota reform movement has severely impacted Bangladesh's garment sector, leading to significant financial losses. Industry associations estimate that the garment and textile sector suffered losses of approximately $800 million over five days due to disruptions. Furthermore, the communication blackout during this period resulted in an estimated $4 billion loss in orders.
The unrest began on July 17 when mobile internet services were suspended following violence and clashes during a "complete shutdown" called by BoishommoBirodhiChhatraAndolon, a platform advocating for quota reform in government job recruitment. The situation escalated, leading to a shutdown of broadband services on July 18, the declaration of a general holiday, and the imposition of indefinite curfews, resulting in the closure of all industrial establishments.
Operations resumed on July 24, but the damage was already done. Mohammad Hatem, Executive President, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), reported, the sector lost approximately $4 billion worth of orders to competitors due to the inability to communicate with buyers during the blackout.
To mitigate these losses, garment manufacturers have requested a one-year loan at a 2 percent interest rate and appealed to the finance minister and Bangladesh Bank to suspend loan installments and interest payments for the next six months. Hatem noted, currently 80 percent of garment sector owners are in critical condition and without government intervention, many factories risk defaulting on loans and closing.
SM Mannan Kochi, President, Bangladesh Garment Manufacturers and Exporters Association (BGMEA), estimates, the garment export sector incurred losses of Tk 11,050 crore, with the production sector alone losing Tk 7,400 crore. The washing and linkage sectors faced losses of approximately Tk 3,000 crore. The supply chain collapse left workers without wages, and interest on bank loans will still need to be paid, exacerbating the situation.
In response, Khalid Mahmud Chowdhury, State Minister announced the waiver of delay fees on imports and exports for the period when port services were halted, aiming to provide some relief to businesses.
