Even after 25 years,
Faruque Hassan, still remembers the humiliation and embarrassment he
faced when he ventured into garment exports, an unchartered territory in
an impoverished country like Bangladesh.
Very few western nations would give him a business visa. On
many occasions, he missed out on international trade fairs and key
meetings with his western buyers as his visa didn't come through on
time.
"Finally, when I went with some samples many western buyers
were sceptical," Mr Hassan, who started a garment factory in Dhaka in
1985, told the BBC.
"They wouldn't even meet me. They couldn't believe that a country like Bangladesh can export clothes to rich western nations."
Western brands
Today, Mr Hassan runs nine factories across Bangladesh and
clothes made in his factory are exported to Germany, Switzerland,
Austria and Canada.
There are more than 4,500 garment factories across Bangladesh employing more than 3.5 million people, most of them women.
Major western brands like H&M, Wall Mart, Gap, Next and
Marks and Spencer buy their clothes from Bangladesh.
What started in some humble concrete buildings outside the capital Dhaka has now become the country's key foreign income earner.
In the current fiscal year, Bangladesh exported more than $18bn
(£11bn) worth of ready-to-wear clothes, amounting to nearly 80% of the
country's overseas sales.
Bangladeshi entrepreneurs say their country has now become
the second biggest exporter of ready-made clothes in the world after
China.
 |
| Mr Hassan says when he first started he had trouble even getting a visa |
A recent report by the accounting firm KPMG
said that, with increasing labour costs, rising inflation and a
strengthening currency, China was losing its foothold as the world's
lowest cost manufacturer of consumer goods, and countries like Indonesia
and Bangladesh had been the biggest winners.
Low wages
The success of the Bangladeshi apparel industry is mainly
attributed to its low production costs, in particular its cheap labour.
The average monthly wage for a garment factory worker is about $43, whereas in China it's more than a $100.
"The closest to the Bangladeshi wage is in Cambodia, where
garment workers get around $61 per month," says Zahid Hussain a senior
economist with the
World Bank.
"That's almost 50% more than the Bangladeshi wages. So, the labour advantage for Bangladesh is quite huge."
With a population of more than 150 million, Bangladesh is one of the most densely populated countries in the world.
With most people depending on agriculture for their
livelihood, garment factories offer the highest number of jobs in the
industrial sector.
The KPMG report said countries such as Bangladesh had an advantage in terms of their young work force.
While the average Chinese citizen is 34 years old, the
average Bangladeshi by contrast is almost 10 years younger, and nearly
half of the population of the country is of working age.
"In addition to the cheap labour cost, there is no doubt that
Bangladesh is also benefitting from various preferential trade
agreements," says Golam Moazzem, a senior research fellow at the
Centre
for Policy Dialogue in Dhaka.
 |
| The workforce in the Bangladeshi garment industry is dominated by women |
"For example, the EU allowed duty-free access to Bangladeshi clothes in January this year."
The Bangladesh Export Promotion Bureau estimates that at the present level of growth, garment exports would reach $30bn by 2015.
But it says the growth also depends on the impact of the global economic crisis on major western nations.
Child labour
In the early days, for factory owners like Mr Hassan, finding
workers was not a problem, but finding skilled and knowledgeable people
was a big challenge.
He says factory managers spent hours educating their workers
in the basic skills of cutting, stitching and operating sewing machines.
"It's not only the physical training," remembers Mr Hassan.
"We had to teach our workers on simple things like how colour matters in
dresses.
"In one of our first orders we ended up stitching a large
number of pink colour dress for the boys and blue colour frocks for
girls."
As Bangladeshi clothes started travelling far and wide, its labour standards also came under closer scrutiny.
The factories were accused of exploiting poor workers to
produce cheap clothes, and in some cases using
child labour to keep
their costs low.
 |
| Labour unions say salaries need to increase |
In 1995, UNICEF struck a landmark deal with the Bangladesh Garment
Manufacturers and Exporters Association to end child labour in the
garment factories following international threats to boycott the
industry.
By 1998 more than 10,000 children were removed from work
under the programme, and nearly 80% of them were enrolled in
community-based schools.
Workers' unions say that, despite assurances from factories,
working conditions still do not meet those standards in many outlets,
especially outside the special export promotion zones.
They say workers are also not happy with the minimum wage announced in late 2010.
"Given the inflation and rising cost of living, it is
increasingly difficult for a garment factory worker to survive under the
present salary," warns Muhammad Touhidur Rahman, a Bangladeshi union
leader.
"If their concerns are not addressed, we can see more labour unrest in the coming years."
The other big challenge for the garment industry is infrastructure bottlenecks.
Road and rail networks have become more congested in the last
20 years, and the country faces a daily shortage of about 2000MW of
electricity - almost a third of its requirement.
"We are also worried about the global economic crisis," says
Mr Hassan. "Since more than 80% of our exports go to the United States
and the European Union, we are entirely dependent on them.
"If the crisis continues there, we will definitely be
affected. So, our next challenge is to find new markets in countries
like India, Japan and South American countries."
By Anbarasan Ethirajan
19 September 2011, BBC News, Dhaka
