Call to raise RMG incentive to 15 per cent from 5 per cent

January 31, 2009

Staff Correspondent
Leaders of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manu-facturers and Exporters Association (BKMEA) have urged the government to raise cash incentive in Ready Made Garment (RMG) sector to 15 per cent from existing 5 per cent to face the adverse effect of the global meltdown.
Talking to The Bangladesh Today, the industry people said all US and EU apparel importers, hit hard by financial crisis, are pressuring for price cuts. So, they urge the government to make a contingency support package. Pointing out the Indian and Chinese suppliers who are backed up by huge devaluation of their currency, RMG manufacturers also said an immediate action plan is needed to save the country largest export earning sector.
Mohd, S Salam, BGMEA 1st vice-president said, “There has been an adverse effect of the current global economic downturn for last couple of the months and if we fail to provide enough assistance to this huge industry, it will be difficult for the industry to sustain, So on an emergency basis, the government should raise cash incentives to 15 per cent soon. If this industry is hard hit by the global economic recession, many owners will be compelled to shut down their industries and hundreds of people will lose their jobs.”
He also laid emphasise on formation of a committee with the participation of all stakeholders concerned to press home their demands before the government to implement a comprehensive plan to save the industry. “Due to continuous economic slowdown, jute and shrimp industry have been facing a serious set back and this happened due to failure of government to take necessary steps.”
Shahidul Islam, another vice-president of BGMEA told this correspondent that they had a meeting where representatives of all business bodies participated to outline an action plan to save the industry from the negative impact of the current global meltdown. “We have submitted a set of recommendations to the concerned ministry of the government and finance minister has assured us to send these recommendations to the Prime Minister for implementation of these suggestions on an emergency basis.” he said.
“Like other countries, the government should adopt a comprehensive bail out plan to save the local potential industry. The government should provide all out assistance to the RMG industry to help it sustain in this critical juncture,” he said.
BKMEA vice-president MA Baset said financial support is the only solution to the existing crisis and this support would help to revitalise the RMG sector. He also reiterated the demand for providing increased incentive immediately.
“The government will have to inject cash money into this sector to revitalize it. Besides, there are still some bureaucratic tangles that cause huge problems for the RMG sector, these problems also need to be addressed immediately.” he said.
It may be noted that Bangladesh exported $10.7 billion worth of readymade garments, including $5.5 billion worth of knit wears, in 2007-2008. The industry has projected a 16 per cent export growth in the current fiscal year despite global meltdown.

Courtesy: thebangladeshtoday.com

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