"We think the board gave priority to political consideration and did not take into account implications of the proposed pay structure on the garment industry," Fazlul Hoque, president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said at a press briefing at its office in Dhaka.

"It is not possible to implement the basic economic policies if it is influenced by politics," he added.

Terming the inconsistency of salary increase in the seventh grade with other grades "impractical", the leaders said it was very unfortunate that the proposed pay structure was placed for discussion only one hour before signing.

An analysis is necessary before implementing a pay structure in phases when safeguard measures will be withdrawn against Chinese exports to the European Union in 2007 and to the US market in 2008, they said.

Tipu Munshi, former president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said the proposed pay structure was imposed on the garment owners and there is a political ambition behind announcing it.

"It is better to close those factories now which would be forced to face the same fate just after implementing the proposed salary hike," he said. "We definitely want to increase the wages of the workers but we do not want to bow down before the political gain," he added, rejecting the proposed pay structure.

Annisul Huq, BGMEA representative on the wage board, said around Tk 1,300 salary hike was proposed for grades that did not have any debate. The proposed wage was signed without any discussion.

No factory owner will prefer shutting down the factory, he noted.

BGMEA President SM Fazlul Huq said some fear that 50-70 per cent garment factories may face shutdown if the proposed wage is implemented.

He urged the government to revise the proposal so that the growth in the sector can continue.

The garment leaders said when price index went down by 15-20 per cent in the last five years, government subsidy declined to 5 per cent from 25 per cent.

Moreover, rising fuel oil price, interest and other bank charges as well as transportation cost have weakened the ability of exporters to face the exorbitant wage hike, they said, adding that severe load-shedding, congestion at Chittagong Port, political instability and other adverse issues have added more risks.

BKMEA President Fazlul Hoque said the garment owners are continuing their efforts to fix an amount very close to Tk 1,604 as the minimum wage but further discussion can take place with the government and the workers as several hundred factories may face closure.

"We totally disagree with implementing the proposed pay structure in phases over three years and the pay structure of all other grades," he said, urging the government to ensure assistance like other competing countries.

He demanded an increase of cash incentive to 10 per cent from five per cent as export subsidy from the day the new wages are implemented. Bank interest rate should be within seven per cent and uninterrupted electricity and hassle-free port should be ensured, he said.