Textilesresources.com / August 8th, 2024, India
Amid political unrest in Bangladesh, the situation has been extremely critical in the country for a couple of days, PM Sheikh Hasina has resigned and fled, the Bangladesh army has announced an interim government, and the violence spread across the country. Violence in any country or even a small area costs hefty amounts as it disturbs several economic activities, including day-to-day life, daily administrative activities, local markets, food and daily utilities supply chain, transport, food delivery, manufacturing set-ups, and everything, there is a hefty price tag. As Bangladesh faces regime change, the biggest task before the new government will be to stop the free fall of the economy, the damage from mass violence, unemployment, persisting inflation and slowed real GDP growth may impact the economy of Bangladesh. As per the local media report, the FMCG industry would have a setback of over US$100 million.
The RMG sector comprises 84% of the country’s export earnings and is a cornerstone of Bangladesh’s economy, their export earning is increasing at a compound annual growth rate of 7%, which was US$33.1 billion in 2019. Despite its remarkable growth, the RMG sector in Bangladesh has already been facing server critical issues within the country along with growing competition such as Sri Lanka, Vietnam, India, etc, and at present turmoil will further dent the industry and thus the economy of the country. The garment industry in Bangladesh has been closed amid political turmoil and violence across the country since Sheikh Hasina stepped down and fled, this will affect the brands being manufactured in Bangladesh such as H&M and Zara and many other top apparel and fashion brands. By leveraging the China-plus-one strategy, Bangladesh has reserved its market share in the RMG sector, however, due to the current uncertainties in Bangladesh, international buyers may adopt a Bangladesh-plus-one strategy, perhaps potentially benefiting India’s textile and apparel sector.
Furthermore, there would also be a huge direct and indirect impact on many other fronts such as export-import tie-ups with all countries, foreign exchange reserves, trade shows within the country and exhibitors from Bangladesh to the shows in other countries such as the leading apparel and fashion sourcing shows such as Global Sourcing Expo at Australia and Texworld/Apparelsourcing New York City and more.
