Fund, tech and policy support needed for circular economy in Bangladesh’s textile sector

A circular economy is a system where materials never become waste, and nature is regenerated.


Visitors observe the workings of machinery on the opening day of the 17th Dhaka International Textile & Garment Machinery Exhibition 2023 at International Convention City Bashundhara in Dhaka yesterday. PHOTO: THE DAILY STAR

December 6, 2023

DHAKA – Bangladesh’s textile sector needs adequate funds, technology and policy support to ensure a circular economy, which will be a major requirement to export products to western countries in upcoming years, experts said yesterday.

A circular economy is a system where materials never become waste and nature is regenerated. In a circular economy, products and materials are kept in circulation through processes involving maintenance, refurbishment, reusing, remanufacturing, recycling, and composting.

Remarking that the RMG sector was already facing a crisis given tight margins and the slowdown in the global economy, Asif Ibrahim, a director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), questioned how entrepreneurs would finance adequate investment for the development of a circular economy.

“It is going to be extremely difficult to finance the investment,” he said while speaking at a workshop titled “Advancing Circular Textiles Policies in Bangladesh”, organised by Policy Exchange and Chatham House with support from the United Nations Industrial Development Organization (UNIDO).

The event was held at the auditorium of the Metropolitan Chamber of Commerce & Industry (MCCI), Dhaka.

Brands need to be engaged in this process because such business practices will lead to additional costs and the government also needs to incentivise firms to use sustainable raw materials, he added.

Circular economy is a priority for the European countries as they are committed to reducing carbon emissions and building sustainable supply chains, said Edwin Koekkoek, team leader for Green Inclusive Development at the delegation of the European Union to Bangladesh.

Sustainable business practices are essential to fight climate change and reduce pollution, especially in the textile sector, which is one of the sectors that contributes the most to carbon emissions, he added.

Vidiya Amrit Khan, a director of the BGMEA, said the government needed to frame guidelines for the transition.

“We need to define the responsibilities of each stakeholder in waste management,” she said, adding that financing the required investment was a big issue, so financial institutions should come forward with low rates.

She also said the government should provide incentives for sustainable business practices, adding that the waste management system was mostly driven by an informal sector controlled by powerful political people. “So, here political support will be necessary,” she added.

Patrick Schröder, senior research fellow of Chatham House, said the country needed to develop specific industrial guidelines applicable for post-industrial waste in the RMG sector, covering all aspects of waste management from waste reduction, sorting and collection to the use of alternative materials.

He also proposed to improve the tax environment, provide incentives for investment, adjust tariffs for jhoot trade, promote investment by providing loans, raise awareness among stakeholders, and implement existing waste management regulations in the jhoot sector.

Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, said a circular economy could expedite exports of the RMG sector.

He added that this issue needed to be prioritised since western nations and the brands have their own commitments and targets to reduce carbon emissions.

Consequently, countries and brands will not buy products from factories that fail to ensure environmental, social, and corporate governance in their firms even if they offer products at lower prices, he added.

Zaki Uz Zaman, country representative of UNIDO, Shams Mahmud, former president of Dhaka Chamber of Commerce and Industry, and Abdur Rahim Khan, additional secretary of Ministry of Commerce, also spoke at the event.

Hasnat Alam, economist & senior manager of Policy Exchange, said the main barriers to the transition are the existing informality in the waste collection sector, limited technological capacity and infrastructure, and the huge investment required for specialised machinery and recycling materials.

He recommended learning from other countries and focusing on research and development for a smooth transition.

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