half a million jobs lost in 2024

At least 76 factories have gone bankrupt and the most affected have been women. The depreciation of the taka, financial pressure and the decrease in international demand influence. They ask for government subsidies and reduction of interest rates on loans. Fazlul Haque, former operator of the sector: “Political stability is essential for the country to develop.”

Dhaka () – More than half a million workers – mostly women – have lost their jobs in the last year. At least 76 factories have closed their doors and nearly a hundred others are on the verge of doing so. These are the figures of the unprecedented crisis faced by the garment manufacturing (RMG) sector in Bangladesh, which was once the backbone of the export economy. Sector operators attribute the situation to a combination of global and national challenges that have forced factories to struggle to stay afloat.

Bangladesh is the second largest clothing producer in the world after China, from which developing countries buy increasing quantities. Experts fear that if the situation persists, other factories could be forced to close, worsening unemployment. Fazlul Haque, former president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the national organization of garment manufacturers, pointed out the severity of the crisis: “The garment sector is operating at a very slow pace. With few exceptions, most factories are making losses. “The more the machines run, the more the owners get into debt.”

The problems have their origin in international and national issues. The depreciation of the Bangladeshi taka against the US dollar has raised the cost of importing raw materials, while high interest rates on bank loans and persistent electricity service shortfalls have severely tested production. The gas supply crisis and increased taxes have also increased financial pressure on producers.

On the international front, demand from key markets has declined. In the last year, export orders fell 3%. For their part, buyers in the European Union have reduced prices on clothing from Bangladesh by 5% and Americans by 8%. These price cuts, coupled with lower overall demand, have left factory owners struggling to cover costs.

Despite the crisis, Bangladesh’s RMG sector exported $38.48 billion in 2024. Knitted products accounted for $20.52 billion of this total, while textile products contributed $17.95 billion. However, sector experts warn that these figures hide the serious financial stress suffered by producers. Many factories have been forced to absorb losses to maintain export volumes, an unsustainable long-term strategy.

The loss of more than half a million jobs has mainly affected women, as they make up the majority of the sector’s workforce. This sudden unemployment has plunged many families into financial difficulties, with repercussions on the economy as a whole. To revive the sector, industry leaders and stakeholders are calling for comprehensive support measures such as government subsidies, lower interest rates on bank loans and investment in alternative energy sources. If action is not taken quickly, the clothing sector runs the risk of continuing to decline.

Under the jurisdiction of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), there are currently 2,564 garment factories. Furthermore, more than 600 factories operate in eight Export Processing Zones (EPZs) across the country. Despite this broad industrial base, 76 BGMEA-affiliated garment factories closed in 2024. Former President Fazlul Haque pointed out the importance of political stability for the growth of the country’s industrial sector. “There are no alternatives to a stable government for the development of the country’s industrial sector. An elected government is essential to address the crisis in the industrial sector,” he said.

According to data from the Bangladesh Bureau of Statistics (BBS), the total number of unemployed in the country also increased slightly, reaching 2.66 million in the July-September 2024 quarter. The quarterly employment survey published on Sunday reflects an increase of 20 thousand unemployed compared to the previous quarter.