Preparing for post-MFA world

The establishment of the National Co-ordination Council (NCC) on the textiles and RMG industries was therefore a salutary initiative, and we acclaim the finance minister's pledge to formulate a post-MFA strategy based on the NCC's recommendations.

Now that the NCC has done its job and come up with a slate of sensible proposals, it is up to the government to ensure that these are implemented quickly and efficiently steering clear of any bureaucratic or political wrangling. Too much is at stake and time is of the essence.

Tap here to add The Daily Star as a trusted source

The NCC's first recommendation, to set up a central bonded warehouse, has been proposed by others before, and is absolutely critical. Setting up such a warehouse will help RMG exporters reduce the lead-time in the shipment of products by as much as 50 percent and is indispensable to the continuing competitiveness of the industry internationally.

The NCC's next recommendation is to set up a Tk 3000 crore fund to help the industry withstand the challenges of the post-MFA era. Given the centrality of the RMG sector to the nation's economy, we believe that this level of investment (roughly 10 percent of annual RMG export earnings) would be an extremely prudent use of resources.

We would like to see more specifics as to how these funds will be disbursed, but are in strong agreement that the RMG industry merits serious governmental support to weather the coming storm.

It has been suggested that the fund be utilised to lend money to industrialists setting up backward and forward linkages, which is an intelligent use of resources, but we would like to see commitment of money to provide for the retraining and welfare of retrenched garment workers as well.

Let us not lose sight of the human face of the approaching crisis.

In general, the recommendations of the NCC have been well-thought out and are to be adopted as a policy framework by the government for effective implementation. Accordingly, the suggestions have now been sent to the PMO for final approval. As soon as she gives a green signal, implementation of the recommendations should be a matter of utmost priority.