Partnerships key to apparel value chain recovery

Staff Correspondent

22 April, 2021 12:00 AM printer

Partnership between brands, suppliers, governments and international organizations can help the garment industry value-chain of Bangladesh and Sri Lanka hit by corona recover from the crisis, suggests a new study.

The recovery of many global apparel supplying countries has been slow, including that of Bangladesh and Sri Lanka, the study finds. 

Global imports of apparels during the period of January-August 2020 contracted by 23 percent compared to the same period in 2019, it said.

The medium-term recovery of the global apparel value chain from the disruptions of the COVID-19 pandemic has been set back by the prolonged demand slump.

Initiatives of major brands or buyers were found to be limited and their orders were over-concentrated to a limited number of sources, the study said.

Addressing medium-term challenges through national-level interventions alone will be difficult, it added.  

These observations emerged at an International webinar titled ‘Recovery of the Apparels Sector of Bangladesh and Sri Lanka: Is a Value-chain-based Solution Possible?” held on Tuesday evening.

  The webinar was jointly organised by Centre for Policy Dialogue (CPD) and the Institute of Policy Studies of Sri Lanka (IPS) in partnership with Southern Voice.

In the keynote presentation, CPD’s Research Director, Dr Khondaker Golam Moazzem, and Kithmina Hewage, Research Economist of IPS, stated that the study found that major sourcing countries have either reshored or over-concentrated to limited number of sourcing countries during the pandemic period.

There is limited level of initiatives of major market players to keep the suppliers of major sourcing countries and the world of work in uncertainty to address the medium-term challenges.

A major shift in the distribution of export orders by buyers during the COVID-19 period (January–June 2020) has deprived a number of major supplying countries, including Bangladesh and Sri Lanka.

Analysis shows that an additional $2 billion worth of orders could be redistributed to supplying countries if the pre-COVID period’s market share of export orders is maintained in case of the largest supplying country - China.

The study proposes that in case of a major global crisis, a redistributive approach should be maintained to ensure export orders at least at the pre-crisis level, particularly for countries that have fiscal constraints and weak social support programmes to support their suppliers and workers.

Husni Salieh, Director, Strategic Transformation, MAS Holdings, Sri Lanka, also a panelist of the even, said the value of a value chain is truly optimised when its stakeholders work collaboratively particularly during the crisis.

He also added that building resilience within a relatively diversified but existing value chain has the capability to face the current and future crisis successfully.

The next distinguished panellists, Mostafiz Uddin, Founder & CEO, Bangladesh Apparel Exchange, said that there is a lack of responsible business practices among the brands during the ongoing crisis.

He suggested that the brands should considertheir suppliers as business partners and act responsibly.

Binu Wickramasinghe, Co-Founder & Managing Director, The Design Collective Store, Sri Lanka, as another panellist, stated that smaller enterprises, like their one, faced comparatively more difficulties during the crisis, particularly in accessing credit, 

adapting to the new normal.

She also added the e-commerce was the biggest game-changer for them in coping with crisis.   

Another panellist, Pierre Börjesson, Head of Sustainability - Global Production, H&M Group, said that the pandemic had shown the importance of acceleration ofdigitalisation in doing business.

He also added that Bangladesh and Sri Lanka should consider how the market could be made more agile and flexible in terms of product diversification, services connected to the products and addressing the sustainability to achieving the possibility of trading higher than in the past.

Finally, the panelist Dan Rees, Director of Better Work, International Labour Organization (ILO),opined that only sector-specific measure might not address the existing challenges.

He also added that to build strong resilience and protect the workers, trust and cooperation among the stakeholders and a long-term plan is required.

Prof Mustafizur Rahman, Distinguished Fellow, CPD, moderated the session. He stated that the study's findings are crucial as all the stakeholders of the apparel value chain had been affected by the pandemic. He also said that all the stakeholders have to play certain roles to find a solution that ensures the sustainability of the industry.

CPD’s Chairman, Prof Rehman Sobhan, said that ILO could consider playing an entrepreneurial role in bringing together international buying countries with supplying countries to restructure of global demand management.  He further added that tripartite exercise should be carried out, including government, employers, and workers to produce a mutually accommodating system of unemployment insurance to address not just the immediate impact of the COVID crisis but a longer-term crisis.

M Syeduzzaman, Member, CPD Board of Trustees and former finance ministerwas also present at the dialogue. The dialogue was also participated by relevant stakeholders, including a few key global apparels value-chain stakeholders, who shared their views on the recommendations of the study and media professionals.

CPD’s Executive Director, Dr Fahmida Khatun delivered welcome address at the event and talked about different aspects of the study.

She discussed how the pandemic has disrupted the global apparel value chain and shared that the study presents probable solutions to the challenges that have emerged for the apparel-supplying countries, particularly in Bangladesh and Sri Lanka.