Sometimes an industry needs a helping hand. This has happened in many countries at different times in history. Entrepreneurs in the RMG sector in Bangladesh may not always ask for state intervention, whether it is our national policy makers or international bodies. Often the state is associated with bureaucracy, regulation, slowing things down and – in some cases – even corruption.

It is well recognized that without the support of public policy – finance, the Bangladesh RMG sector could have been facing an entirely different scenario at this time. Let me first say that the industry is already in some areas in dire straits. Hundreds of thousands of jobs have been lost due to plant closures and the loss of billions of dollars in orders.

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The industry will survive and thrive again, but it may be a different animal that moves forward. Thinner? Of course. More resilient? Without a doubt.

But, in many cases, survival depended on the support of the state and government agencies. National and international governments have supported our industry to a remarkable degree over the past 12 months, which is an incredible vote of confidence and shows how strategically important RMG production is to the economic fortunes of Bangladesh.

Starting with Bangladesh only, the banks have largely supported our sector. Last March, when this pandemic really started to take hold, the Bangladesh Bank quickly intervened and announced a moratorium on loan repayments until December 31, 2020. It was also announced that banks would be allowed to extend deadlines. LC payment for importing raw materials. .

Meanwhile, a series of stimulus packages have provided a lifeline of liquidity to many of our businesses. At the beginning of April last year, the government agreed to provide Tk300 billion in funds to banks to provide working capital loans to affected industries. These loans carried an interest rate of 9 percent, half paid by the borrower and the other half by the government as a grant.

At the same time, BB has set up a revolving refinancing scheme of Tk 150 billion to ensure financing by the banks.

Another package saw the government provide Tk 200 billion in funds to banks to provide working capital credit facilities to small and medium-sized businesses. These loans carried an interest rate of 9 percent, of which 4 percent was to be borne by the borrower and 5 percent by the government as a grant.

Under a “back-to-back” LC agreement, the Export Development Fund was increased from $ 3.5 billion to $ 5 billion to facilitate continued imports of raw materials.

Finally, the Central Bank also launched a Tk 50 billion pre-shipment credit refinancing program.

Besides industries, the government has supported families who have been affected by the pandemic – remember, many of them have lost their jobs in the past year. Last May, the Prime Minister launched the disbursement of Tk 12.5 billion in cash assistance for five million poor families. Each family received 2,500 Tk through Mobile Financial Services (MFS).

Other governments and donors have also stepped up when we need them. The Asian Development Bank (AfDB) has provided a loan of US $ 600 million as financial assistance to fight the pandemic in Bangladesh. It also provided an emergency grant of US $ 0.35 million and a one-time cash support facility of US $ 1.3 million.

In May, the International Monetary Fund approved emergency assistance of US $ 732 million for Bangladesh under the Quick Credit Facility and the Quick Finance Instrument. Around the same time, the World Bank approved fast-start funding of $ 100 million to help Bangladesh prevent, detect and respond to the pandemic and strengthen its national system for public health emergencies.

Add all of the above together and it is clear that our industry and our people have received a fair amount of help and financial support over the past year – and we still do. Without this support, I think it’s safe to say that more companies would have gone bankrupt, more workers would have lost their jobs, more people would have fallen into poverty and more would have lost their lives due to this terrible disease. .

Where are we now? Here I have argued for state intervention in the form of what we might call “life sustaining” for our industry. Much of our industry has been on life support for 12 months.

But I hope that support doesn’t stop now. We are still a long way from being out of the woods, as this pandemic has been going on for much longer than many people would have imagined.

While the past 12 months have been about providing funds to keep us afloat, now we need sustained financial and other support as we all look to the future. If the financial assumption is pulled on the industry now, much of what was invested in the past 12 months will be wasted. Let’s face it, for many manufacturers orders still haven’t picked up (or are just starting to increase).

Yet now we need to start thinking about the future. Many manufacturers still have serious liquidity issues that will only be resolved with a brief and abrupt injection of cash. I sincerely hope that our policymakers can provide the industry with the support it needs as it sails over the next few months and begins to fill order books.

Looking ahead, the past 12 months have strengthened the interdependence of the public and private sectors. Public bodies aren’t always popular, but evidence from 2020 has shown that they can provide a safety net and be a lender of last resort in the event of market failure (in this case due to a single pandemic) .

The more businesses that can be kept alive, the more crucial it is to our overall funding going forward. The RMG in Bangladesh, being so strongly export oriented, is vital in terms of the tax revenue it brings in. It also plays a key role in ensuring a healthy balance of payments with regard to international trade.

Governments have been our savior this year. The whole RMG industry in Bangladesh should always be grateful. But the crucial work is not yet finished.

Mostafiz Uddin is the Managing Director of Denim Expert Limited. He is also the founder and CEO of Bangladesh Apparel Exchange (BAE).