Tag Archives: Corruption

52. The garment industry in Bangladesh

I have been meaning to write something about the garment industry in Bangladesh for some time. I hadn’t realised, before I arrived, that Bangladesh is the second largest clothing producer in the world, after China. I started reading about the sector to try to find out the reasons behind its success, and also those behind the oft-reported unrest amongst workers in the garment industry. I had hoped that I would get the opportunity to visit a garment factory, but it’s proving difficult to make the necessary connections. (I tried turning up on a factory doorstep one day but was duly turned away.) There are regular stories in the papers of protests by garment workers for better conditions, which often evolve into riots. For example, on 1st February last there was a picture of striking workers carrying red banners with slogans. The caption underneath the picture read:

Members of Bangladesh Garment Workers Unity Council take to the streets in Dhaka to press home their five-point demand, including a raise in the minimum monthly salary to Tk 5,000 from Tk 1,662.50 now.

The current monthly salary quoted above amounts to just under €16: they want it to rise to €48. (I get €96 per month as a volunteer and could not live on this without access to personal funds.) Bangladeshi garment workers are the most poorly-paid garment workers in the world. These rates of pay are especially low when you consider how profitable the ready-made garment sector is here. In fact, the achievements of the sector have been truly remarkable, when the high cost of doing business in Bangladesh over past decades is considered. These include, for example, ill-governed infrastructural power and transport facilities, bureaucratic delays and inefficiency, political instability and frequent strikes and interruptions to services (water, electricity, etc.).

Despite such difficulties, the ready-made garment industry now accounts for 80% of the nation’s export earnings. Part of the industry’s early success can be attributed to the international Multi-Fibre Agreement (MFA). Some poorer countries, including Bangladesh, received larger quotas, which protected them from competition and enabled them to attract foreign investment. Between 1990 and 2004, Bangladesh saw its exports of garments increase more than eightfold from US$620 million to US$5.7 billion. Despite fears that the end of the MFA agreement in 2004 would herald a rollback, Bangladesh not only upheld prior gains, but improved, and continues to improve, the performance of the industry.

Apart from the benefits of the MFA, as described above, and foreign investment in export processing zones, the garment industry also benefits from collaborative agreements with importers and their representatives in Bangladesh. Through these agreements, the industry receives assistance and guidance to meet the specifications and quality standards required for overseas markets.

Some have described the profits in the sector as ‘supernormal’. These supernormal profits more than offset the high cost of doing business in Bangladesh, arising from the kinds of misgovernance referred to earlier (and elsewhere in this blog). Furthermore, entrepreneurs are mainly from the elite or ruling classes in Bangladesh i.e. retired civil and military officials and politicians, all with connections to influence government policy decisions in the industry’s favour e.g. export subsidies, tax rebates on import components, bonded warehouses, back-to-back licensing systems and exemption from enforcement of labour and safety standards. They can, therefore, greatly economise on working capital needs. Furthermore, they are in a position to offer illicit payments (bribes) to the often poorly governed, corruption-ridden air, sea and customs authorities. (For example, Chittagong Port – see post 43.) While poor governance makes the bribes necessary, the bribes in turn ensure that the corruption continues. Some commentators go as far as to say that the most successful institutionalised system of corruption in the country was established by the garment industry (see also post 51).

The industry accounts for 40% of Bangladesh’s total industrial workforce. Approximately 3 million people are employed in more than 4,800 factories and 80% of these are women, for whom the industry has been a mixed blessing. There have been social and economic benefits e.g. the empowerment of women through increased visibility, greater independence and mobility and more personal choice. (See post 44.) However, for many women, these opportunities have come at a cost to their health, and an increased risk of danger and harassment. (For example, there have been some horrific fires in garment factories.) Numerous women migrate to Dhaka from rural Bangladesh, lured by the promise of a better life. The many protests that I have witnessed since my arrival attest to the inadequate working conditions. While there are policies and procedures in place to protect the rights of workers, these are not adequately enforced, if enforced at all. This is allowed to happen because the garment factory entrepreneurs have influence over regulatory authorities, who ignore violations, and because the high profits enable them to buy off the enforcing agencies.

As well as the onus on the government to ensure enforcement, there needs to be a duty of care on the part of companies who procure the output from these garment factories. We, as consumers and purchasers of labels made in Bangladesh, are also complicit through our silent ignoring, and thereby condoning, of the conditions of manufacture. Is our search for bargains, for example, justified when those who make our clothes earn unfair sub-subsistence rates, work in unsafe environments and are denied any employment rights? Have a look at this photo essay. The photographs were taken by award-winning Bangladeshi photographer and activist Taslima Akhter, who works to bring some of the darker aspects of the garment industry to light.

How many accidents, and ultimately deaths, will it take for consumers to insist on transparency, all the way through the supply chain? We need to use our considerable power as consumers: companies listen to consumers. We should be aware. If not, we need to ask questions of companies: how do they source and manufacture the clothes they sell? We could look on their websites, send e-mails, seek assurances.

Many companies are getting behind ‘Fair Trade’ and other ethical trading initiatives. To read more about fair trade and the garment industry see, for example, Labour Behind the Label and Fairwear. The latter has been awarded a grant by the United Nations Trust Fund to End Violence against Women to work in India and Bangladesh. They will partner with local organisations here in Bangladesh,

to implement innovative new strategies to reduce workplace violence against women in the garment industry.

You could also read about the kinds of progress being made in the UK, for example, towards a more ethical fashion industry.

Finally, I am including a short report from Aljazeera (2010) on the topic of the garment industry in Bangladesh today.