Bangladesh Crisis: Garment Industry Hit Hard By Political Instability And Natural Disasters

Bangladesh Crisis: The garment and textile sector, which accounts for over 80 per cent of Bangladesh's export earnings and 11 per cent of its GDP, has been significantly affected

Bangladesh Crisis: Small and medium-sized factories have borne the brunt of the crisis, with nearly 800-900 factories shutting down.

Source : FreePik

Bangladesh Crisis: Bangladesh's garment industry, a vital pillar of the nation's economy, is teetering on the edge of collapse due to ongoing political unrest and devastating floods. The dual crises threaten to undo years of growth and disrupt the global supply chain.

The resilience of Bangladesh's garment sector, which has grown from $5 billion in exports in 2001 to nearly $40 billion in 2023, will be tested as the industry struggles to recover from this crisis.

Main Impact

The garment and textile sector, which accounts for over 80 per cent of Bangladesh's export earnings and 11 per cent of its GDP, has been significantly affected. Protests and violence, triggered by two months of anti-government demonstrations, reached a peak on August 5, forcing Prime Minister Sheikh Hasina to resign and seek refuge in India.

Economic Fallout

The turmoil has paralysed factory operations across the country. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) estimates losses of Tk 6,400 crore (approximately Rs 4,500 crore). Khandoker Rafiqul Islam, the newly elected president of BGMEA, has expressed concern about meeting the industry's $45 billion export target for the year.

Industry Leaders Speak

Former BGMEA President Gholam Sarwar Milon confirmed that both political unrest and recent flooding have severely disrupted production and the raw materials supply chain. "The crisis in the garment industry is unprecedented, with production down 15-20 per cent compared to last year," Milon said.

Factory Closures

Small and medium-sized factories have borne the brunt of the crisis, with nearly 800-900 factories shutting down. The Bangladesh Textile Mills Association has projected losses around $58 million, further exacerbating the situation.

Port Chaos

Chattogram Port, responsible for 90 per cent of Bangladesh's international trade, has seen operations paralysed, delaying shipments for up to a month. Efforts to mitigate the impact by using air freight and extended working hours have not fully resolved the bottleneck.

Fears for the Future

Industry experts fear that if the situation continues, foreign investors may seek new markets in other South Asian countries. "Our industry is facing huge uncertainty, and the situation must stabilize soon, or we risk losing our competitive edge," said BKMEA President Mohammad Hatem.

Govt Response

Amid the chaos, the newly installed interim government led by Nobel laureate Muhammad Yunus has promised measures to restore order and stabilise the economy. However, with investor confidence shaken and infrastructure damaged by floods, the path to recovery remains uncertain.