When Storefronts Reopen, COVID-19 Will Strike Places of Production

This article highlights how a fragile economy, a weak healthcare system, and reopening economies in high-income countries could contribute to a low-income country’s risk for high COVID-19 cases and death tolls.

So far in the COVID-19 pandemic, the bulk of coronavirus cases have occurred in high-income countries like the United States, Spain, Italy, and France. Fragile nations and emerging markets are still relatively early in their contagion curves thanks to extended lockdowns and strict national coronavirus guidelines. However, a combination of factors puts these nations at risk for increased numbers of COVID-19 cases — numbers that could tower over those experienced by high-income countries thus far.

For brands and retailers, one of the most crucial coronavirus crisis management priorities is ensuring a safe and healthy work environment for workers returning to factories in their overseas supply chains. Inspectorio is helping by making the Rise platform available, which allows organizations to quickly implement and monitor compliance with COVID-19 health & safety guidelines.

Inspectorio is doing their part. However, this is not enough — the entire industry must act together to properly address the scale of this emergency. 

An Overview of Risk Factors

The following are common risk factors among many countries where products are manufactured:

Fragile Economies

In high-income countries, a strong economy means government stimulus packages are available to help mitigate the economic impact of COVID-19 and enable extended lockdowns. However, nations with low GDPs are less able to sustain these measures for long periods of time.

As of this writing, the global number of COVID-19 cases is just short of 4.5 million, and the number of deaths from coronavirus cases has topped 298,740.¹ Remarkably, over 52% of all cases and 62% of deaths have occurred in just four countries: the USA, Spain, Italy, and France — countries with GDPs ranking #1, #14, #9, and #7 in the world, respectively.^1,2 Even the USA has seen spiking unemployment, with unemployment statistics approaching those of the Great Depression.³

The potential implications for countries with fragile economies are clear.

Weak Healthcare Systems

Among the most destabilizing traits of COVID-19 has been its effect on healthcare systems. Health care workers are extremely vulnerable to infection, and because transmission can occur before symptoms arise, this in turn puts the safety and health of other patients at risk.

Additionally, even hospitals in high-income countries have been unable to handle patient load. The WHO ranks global healthcare systems by their Efficiency Index (0 to 1, with 1 being an optimal healthcare system). Here are the rankings for the worst-hit countries:⁴

All of these countries have experienced strains on their healthcare systems, with insufficient personal protective equipment and shortages in beds, supplies, and healthcare workers.^5-8

Low Prospects for Aid

Even in the best-case scenario, a report by ACAPS predicts that humanitarian aid in low-income countries will be scaled down significantly.⁹ A recent G20 summit also lacked concrete assurances of support in its official statement.¹⁰

Further complicating matters is the amount of disinvestment from emerging markets. 2019 saw around $79 billion invested in emerging markets.¹¹ However, the last two months have seen nearly that amount removed from these economies, thereby affecting the amount of emergency financial aid governments and businesses can provide.^11,12

Reopening Economies in High-Income Countries

When lockdown ends in high-income countries — best estimates suggest this will happen  sometime in the summer or fall — consumption of apparel and other goods will resume, prompting factories to reopen in places of production. Workers will have little choice but to return to work, as their financial resources will by this point have been stretched thin.

Although countries with storefronts will have passed their first peaks, low-income countries that are still early in their contagion curves will return just as cases are beginning to spike.¹³

The virus is therefore at risk of rebounding back to Asia and other places of production.¹⁴ The following mini-profiles illustrate a number of additional risk factors for workers and factories in these countries, including high population densities and a lack of preparedness within workplaces.

Bangladesh

Bangladesh is the world’s eight-most populated country with nearly 165 million people and a population density of 1,265 people/km².¹⁸ Its healthcare system is ranked 88th in the world, with an Efficiency Index of 0.675.⁴

COVID-19 is still in its early stages in Bangladesh, with 18,863 reported coronavirus cases and 283 deaths.¹ The country’s GDP is $250 billion, or $1,564 per capita, with the apparel industry adding $9.3 billion annually to the economy.^2,15 The pandemic is affecting the garment industry with brutal force, leaving over 1 million of the country’s 4.1 million garment employees out of work as of early April.¹⁶

A leaked UN memo has made a chilling prediction for Bangladesh: “Given the extraordinary human densities…between half a million up to 2 million lives [will be] lost during the epidemic wave.”¹⁷

India

The world’s largest democracy is home to 1.38 billion people, with a population density of 464 people/km².¹⁸ India’s healthcare system is #112 globally, with an Efficiency Index of 0.617.⁴

The nation currently has 78,810 reported coronavirus cases and 2,564 deaths.¹ Its spread is aided by high population densities, though rural India is likely underreporting cases.^19,20 With a GDP of $2.65 trillion and $1,980 per capita,² India relies heavily on its apparel industry, with textile and clothing exports reaching $36.62 billion in 2019²¹ and employing 45 million people.²² As of April 9, COVID-19 had already dealt a $2 billion blow to the country’s apparel industry.²³

Extrapolating positive case numbers and death tolls from other countries makes the threat to India’s population clear.

Indonesia

With a population of nearly 274 million, Indonesia is the world’s fourth most populous country.¹⁸ Its capital Jakarta, where much of the country’s $19.3 billion garment industry is located,²⁴ has a population density of 14,464 people/km².¹⁸ Indonesia is ranked 92nd in the world for healthcare, with an Efficiency Index of 0.660.⁴

Indonesia is currently reporting 16,006 COVID-19 cases and 1,043 deaths, putting its death rate among the highest in southeast Asia.¹ Its garment factories employ over 3 million workers, and with factories closing, many workers are left without income.²⁵

Indonesia has received warning that 140,000 people could die in the first wave of the COVID-19 pandemic.²⁶ The country has just 12 hospital beds and four doctors per 10,000 people, leaving people especially vulnerable.²⁷

Cambodia

Among Cambodia’s 16.7 million citizens, over 850,000 work in garment manufacturing.^18,28 This sector contributes $7 billion to the nation’s GDP of $22.2 billion, though its GDP per capita remains low at $1,384.² Cambodia’s healthcare system is ranked 174th in the world, with an Efficiency Index of 0.322.⁴

Cambodia has reported 122 COVID-19 cases and no deaths, though it is worth noting that these numbers have not deviated since April 12.¹ The majority of garment manufacturing takes place around Phnom Penh, the country’s capital city of 2 million people with a population density of 5,700 people/km².²⁹ This density, combined with a weak healthcare system, make Cambodia another vulnerable target for rampant transmission.

Portugal

Portugal’s relatively small population of 10.2 million nonetheless nurtures a GDP of $219 billion, with a GDP per capita of $21,316.² Textile and garment manufacturing is a growing presence to this GDP, accounting for 9% of the country’s exports in 2015.³⁴ Portugal’s healthcare system is ranked well at #12 worldwide, with an Efficiency Index of 0.945.⁴

The nation has been celebrated for its success thus far in battling COVID-19, particularly as neighboring Spain has been among the hardest-hit: it has 28,132 coronavirus cases and 1,175 deaths.¹

However, Portugal has several risk factors that leave its population vulnerable to later outbreaks, including the EU’s third-highest population of citizens aged over 80 and a healthcare system that is “poorly equipped and underfunded” despite its ranking, according to Politico.³⁵ The country has the lowest number of critical care beds by population in the EU.³⁵ The manufacturing industry must not overlook high-income economies when implementing protective measures in their supplies chains.

Thailand

Thailand’s population is just short of 70 million.¹⁸ Its booming garment industry employs around 1 million people and is largely concentrated in Bangkok, a city with 5,300 people/km².^31,32 Thailand’s healthcare system is 47th in the world, with an Efficiency Index of 0.807.⁴

Thailand currently reports 3,018 coronavirus cases and 56 deaths.¹ However, its population has a relatively low GDP per capita of $6,579, creating uncertainty in their ability to cope with extended lockdowns.^2,33 With over 2,000 garment factories, Thailand’s manufacturing is negatively affected but will experience significant demand once consumers begin purchasing again.³¹

Myanmar

Myanmar has a population of 54.4 million and a $4.6-billion-per-year garment export industry.^18,30 The country has a GDP of $67 billion and a per capita GDP of $1,256, with the world’s second-lowest healthcare ranking of 191 (Efficiency Index 0.138).^2,4

Myanmar is still early in its COVID-19 curve, with just 181 reported coronavirus cases and 6 deaths.¹ Yet with much of its garment industry concentrated in Yangon, a city with a population density of 12,308 people/km², its manufacturing workplace facilities are at risk of becoming coronavirus breeding grounds when the economy restarts.¹⁸ Brands can help by preparing workplaces for COVID-19 so that workers return to a safe environment.

Vietnam

With a population of 94.6 million and a $224-billion GDP, Vietnam has a GDP per capita of $2,366.² Its cities are densely populated; Ho Chi Minh, a large manufacturing hub, has a population density of 4,097 people/km².²⁹ Vietnam’s healthcare system is ranked 160th in the world, with an Efficiency Index of 0.393.⁴

The country has implemented strict lockdown measures. Reported cases are currently at 288 with no deaths, though the country’s strict COVID-19 lockdown measures cannot last indefinitely due to economic constraints.¹ Outbreaks could prove disastrous in populated urban areas, and with major brands sourcing apparel and other products from Vietnam, the need for thorough safety measures is pressing.

Ethiopia

Ethiopia has a population of over 106 million, with its capital Addis Ababa containing 5,165 people/km².³⁹ The country’s government has nurtured the up-and-coming textile and garment manufacturing sector, which in 2016-2017 earned $89.3 million for an economy with a GDP per capita of just $757.^40,2 Ethiopia’s healthcare system is ranked 180th in the world, with an Efficiency Index of 0.276.⁴

Ethiopia has confirmed just 272 COVID-19 cases and 5 deaths, though it is likely that their coronavirus statistics are underreported.^1,41 Nature notes that Ethiopia is among seven African nations made vulnerable to COVID-19 by “weak health-care systems, low economic status, or unstable political situation.”⁴¹

Safety measures are crucial in Ethiopia. Organizations with Ethiopian facilities in their supply chains must make every effort to help workers reduce contact when they return to factories.

Turkey

Turkey’s population of 84 million is heavily involved in the apparel industry, with $15.1 billion in clothing exports in 2017 alone.^18,36 Its GDP is $852 billion and GDP per capita is $10,498, making it an upper-middle-income country, with a healthcare system ranked #74 in the world (Efficiency Index, 0.734).^2,37,4

Turkey has so far seen the world’s ninth largest COVID-19 outbreak, with 143,114 coronavirus cases and 3,952 deaths.¹ The pandemic threatens to continue resurging, particularly in population centers and manufacturing hubs like Istanbul with its population of 15.2 million.³⁸

Given what COVID-19 has done in high-income countries, the global health care rankings, populations and population densities described in these country profiles illustrate what it is capable of in places of production.

See an overview of these statistics in the graphic below.

Inspectorio makes Rise COVID-19 platform available to help organizations fight COVID-19

The question now is: how can brands and retailers restart their supply chains without adding to the risk faced by these vulnerable nations?

The answer is to implement vital safety and health programs at all factories, continuously monitor every facility for compliance in real time, and generate corrective action and preventive action (CAPA) plans and training to drive facilities toward continuous improvement. However, such steps have historically been impossible to implement with the speed and scale that is necessary to deal with this type of crisis.

This is where Inspectorio can help. The Inspectorio Rise platform has been adapted to help organizations across the supply chain to quickly and easily implement and monitor compliance with COVID-19 health and safety guidelines.

• Stemming from collaboration with leading brands, retailers and international NGOs, the Inspectorio Rise platform now hosts a library of COVID-19 workplace readiness guidelines, all of which are available to users who sign-up to our COVID-19 Rise subscription.

• Real-time monitoring and reporting provides brands and retailers with instant updates on how their overseas partner facilities are complying with these vital important health and safety initiatives.

• It is now becoming critical to be able to view up-to-date COVID-19 data trends and compliance information side by side. The Rise platform now features a COVID-19 real-time compliance Dashboard, that puts real-time COVID-19 updates and compliance data in one place, letting brand and retailer teams make better-informed sourcing decisions.

• For every assessment that is submitted on the Rise platform, a CAPA report is automatically generated – including automated recommendations for corrective actions, as well as didactic e-learning courses to facilitate continuous improvement.

• A comprehensive Analytics dashboard, including breakdowns of assessment responses and results, helps brands and retailers understand which facilities need improvement, as well as what type they need.

We must all do our part to fortify our partner facilities against COVID-19, and make them safe for returning workers. Inspectorio cannot do this alone — it must be an industry-wide effort. This is the only way to ensure supply chains do not become a culprit for continued spread of COVID-19.

Sources:

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