Bangladesh's Awami League has alleged that the accelerating collapse of the country's Ready-Made Garment (RMG) sector is the direct result of 'grotesque administrative mismanagement, economic paralysis, and total governance failure' under successive authorities since the July 2024 political upheaval. The party's statement, issued on 30 July, squarely targets both the former interim administration and the current Bangladesh Nationalist Party (BNP) government for the sector's deterioration.

Key Allegations Against Post-July Administrations

The Awami League charged that the interim administration led by Muhammad Yunus failed to maintain law and order in industrial zones, allowing what it described as 'lawlessness' to take hold in the country's manufacturing belts. It alleged the administration was 'passive in the face of extortion rings' and unable to secure stable LNG import channels critical to factory operations.

The party was equally sharp in its assessment of the newly elected BNP government, accusing it of continuing the same trajectory through 'political inertia, economic score-settling, and an utter inability to secure primary energy inputs or stabilise a suffocating financial environment.' It argued that instead of enacting emergency economic stabilisation measures — including targeted energy relief, credit guarantees, and urgent trade diplomacy — the administration has remained focused on 'patronage redistribution.'

WTO Data and the Vietnam Overtake

Citing World Trade Organisation (WTO) data, the Awami League said Bangladesh has officially lost its long-held second-place global ranking in apparel exports to Vietnam. The country recorded a mere 0.89 per cent growth in apparel exports — the lowest among major Asian competitors — while the broader global apparel market expanded by 4.46 per cent during the same period.

According to the party, industry estimates indicate that over $2 billion in international apparel orders shifted away from Bangladesh during the post-July turmoil, as Western retail buyers redirected sourcing to regional competitors who capitalised on supply chain disruptions in Dhaka.

Impact on Foreign Exchange and Economic Stability

With the RMG sector accounting for the bulk of Bangladesh's export earnings, the Awami League warned that its decline is weakening foreign exchange reserves, economic growth, and fiscal stability. Factory closures, it said, have deepened economic hardship for workers while draining the foreign exchange inflows on which the broader economy depends.

Notably, this is not the first time political transitions in Bangladesh have rattled the garment industry — but the scale of order diversion and the loss of the second-place global ranking represent a qualitatively sharper setback than previous episodes of labour unrest or political uncertainty.

Warning of 'Terminal Decay'

The Awami League issued a stark warning, stating: 'If Bangladesh's political leadership continues to offer empty reassurances while industrial output collapses, the country not merely loses its second-place ranking; it will permanently lose its position in global trade. Global supply chains do not wait for political recovery; without immediate, drastic policy corrections, Bangladesh's RMG sector faces terminal decay.'

As both political blocs trade blame, the more pressing question is whether any administration will move quickly enough to reverse the order diversion before supply chain realignments become permanent.