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Bangladesh: The textile sector accounts for more than 80 percent of all exports

News from 2020-04-22

Since the end of March, people in Bangladesh have been living at home with a nation-wide shut-down announcement to stop the rampant epidemic. One challenge in this densely populated country is to determine the number of people infected more accurately. And to organise aid in such a way that all people can possibly be reached. Anirban Kundu, head of the KfW office in Dhaka, reports on this.

Bangladesh is currently under a nationwide shut-down, which has been in force since 26 March. As on 20th April 2020, 2984 people infected with Covid-19 had been registered and the death toll was 101. However, the low numbers are mainly the result of limited testing facilities.

Due to the extremely high population density and the close social cohesion, "social distancing" is hardly possible here. Bangladesh is not even half the size of Germany, but has twice as many inhabitants. If it were really possible to prevent the spread of the virus in the long term under these circumstances, this requires at least very determined measures. The fear of social isolation has led the population to ignore the symptoms and refrain from reporting. This is not a good prerequisite for obtaining reliable figures on the incidence of infection and thus for gaining a grip on the virus.

Alltag in Bangladesch
Normal everyday life on the streets in Bangladesh.

So calls for an expansion and an acceleration of the tests are currently increasing. The existing capacities for the treatment of COVID-19 are also far too limited in view of the size of the population. The government has increased the number of testing points from three to nine in the capital Dhaka, plus eight more in the other parts of the country. Special hospitals for Covid-19 patients and isolated quarantine centres are also planned.

The effects of the pandemic are most noticeable in the textile industry, which is very closely linked to the global economy. At USD 40.5 billion, the textile sector accounts for more than 80 percent of Bangladesh's exports - more than 4 million jobs depend on it. Many international brands were forced to close their stores because of Corona, forcing them to cancel or postpone orders. International fashion chains withdrew orders worth almost three billion USD. This meant the loss of almost 900 million individual orders at over 1000 companies in Bangladesh - more than 2 million people will lose their jobs. The shutdown has now also affected companies that are active in the domestic market and, of course, the service providers. However, the situation is most alarming in the informal sector, where numerous people have lost every opportunity to earn a living.

leere Straße in Bangladesch
The view of the currently empty streets.

To remedy the situation, the government has adopted an approx. eleven billion USD multi-pillar package of incentives which will be implemented in short to medium term. Credit and payment facilities are provided to improve the liquidity of companies. An initial aid package has been put together for the export-oriented textile industry to secure the payment of wages and salaries. And the informal sector workers are to be reached by programmes to support people in fragile living conditions, food aid and other government-sponsored provision in all parts of the country. Despite all these efforts, however, it cannot be assumed that all those affected can be provided the necessary support wherever they live - the fear remains that poor and socially excluded people in particular will be left out.

Bangladesh has been exploring budget support of around four billion USD from international development banks including the World Bank and the Asian Development Bank (ADB). It is hoped that further aid measures can thus be announced soon to alleviate the immense need that is foreseeable.

We staff in the Dhaka office have been working in the home office since 21 March, i.e. a few days before shut-down was imposed. The IT infrastructure under the new system works quite well, so we can continue our regular work meetings and contacts with external offices without any problems via mobile phone, video, WebEx etc. Yet nation-wide restrictions of movement of people, goods and supplies have also slowed down KfW project implementation.

There is one new feature: every day we all meet in a video conference to keep each other informed, starting with our health and current situation and ending with questions about project implementation. And last but not least, this way we have also managed to maintain our team spirit in these difficult times.