Bangladesh clothing industry struggles with less pliable workforce

By Anbarasan Ethirajan

 

Majeda Akter Toma had many dreams when she started working in a garment factory near the Bangladeshi capital Dhaka about five years ago.

Recent protests by labourers in Bangladesh turned violent and damaged some factories

Though her wages were low, she thought the job gave her an opportunity to escape from grinding poverty in her village in north-western Bangladesh. A family of five depended on her earnings.

Now she's decided to go back to her village.

"In the last two years, food prices have doubled and our house rent has been hiked by more than 50%," she tells the BBC.

"But our salary did not go up. We are struggling to make our ends meet.

"At least, in our village we can live in our house and don't have to pay any rent. If we work as a farm labourer, we can have three decent meals a day," she adds.

Growing discontent

Ms Toma is one among a growing number of workers who are either leaving their jobs and going back to their villages or trying for employment opportunities to work in the Middle East or Southeast Asia.

Though the number is still small, there is little doubt that the frustration and discontent has been growing among millions of workers.

In Bangladesh, the minimum monthly wage for garment workers is around $38 (£24), at current exchange rates. Trade unions claim its the lowest wage in the world for this type of work.

However, factory owners are in no mood to increase workers' salaries immediately. They point out that just two years ago they had agreed to raise the minimum wage by almost 80%.

They say if they match the union's demand, then they will go out of business.

"Look at the world economic situation. The demand for apparel is not increasing and at the same time our production cost has gone up by 12% last year," says Shafiul Islam Mohiuddin, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

"But we are not getting better prices from the buyers."

Biggest employer
The rising discontent among workers is a big cause of concern, not least because of the importance of the sector to Bangladesh's overall economy.

The garment manufacturing sectors is the biggest employer in Bangladesh

Availability of cheap labour has been one of the key reasons the industry has flourished over the past 30 years. It is now the biggest industrial employer in this impoverished nation.
More than 3.5 million people, most of them women, work in around 4,500 factories around Dhaka and in other parts of the country.

Last year, the country exported around $18bn dollars worth of ready-to-wear clothes, mostly to the European Union and the United States.

International retailers and brands such Wal-Mart, Marks & Spencer, JC Penney and Carrefour source their clothes from Bangladesh.

And as labour costs in other parts of the region, such as China, increase, more global brands are turning to Dhaka to get their products made.

Analysts say that for sustained growth of the sector, manufacturers need to share more of their success with the workers.

"The garments industry in Bangladesh is a success story. But workers think despite being part of the success, they are not feeling the benefits adequately," Dr Debapriya Bhattacharya, a senior economist at the Dhaka-based think tank, Centre for Policy Dialogue, tells the BBC.

"The industry is in the process of getting more new high-value products into new markets. In order to meet the productivity growth, we need to pay the workers better."
'Unprecedented and worrisome'
The calls to sort out the issue with workers have increased even more after the recent labour unrest in the industrial suburb of Ashulia, near the capital Dhaka, which came as a rude shock to the sector.

A number of factories were damaged when tens of thousands of workers, demanding better pay and conditions, clashed with security forces.

More than 300 garment factories were shut down for a few days following the unrest. They were reopened after the government promised them security.
Industry watchers say the violent nature of the protest was "unprecedented and worrisome".

The recent abduction and killing of a trade union activist has only added to the insecurity of the workers. The activist, Aminul Islam, was campaigning for better pay and wages.
His colleagues say his murder in April this year was a warning to those protesting against the low wages and working conditions in the industry.

The government says it is willing to mediate between workers and factory owners but admits that continuing workers' protests will harm the image of the industry abroad.
"There is no doubt protests of this magnitude will definitely send a wrong message," says Khandaker Mosharraf Hossain, the Bangladeshi Labour Minister.

Consultancy firm McKinsey & Company has said that Bangladesh can double its garments exports in the next 10 years and that the country has the potential to become a sourcing hotspot.

But the growing labour discontent is posing a serious challenge to the Bangladeshi clothing industry's attempts to gain ground and analysts warn that it may do irreparable damage to the sector.

"If this is not resolved soon, there's the threat that because of the very nature of this industry, the orders and demands may shift to other countries," warns Dr Bhattacharya of Centre for Policy Dialogue.

- BBC News, Dhaka, 17 July 2012

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Hillary wants garment labour problems addressed

The US secretary of state, Hillary Clinton, attends ‘A conversation with Bangladesh’ in the International School, Dhaka auditorium in the Bashundhara residential area in Dhaka on Sunday. — New Age photo

By Mushfique Wadud

The US secretary of state, Hillary Rodham Clinton said on Sunday Bangladesh should address the labour problems in the garment sector so that big foreign manufacturers did not shy away from investing in the industry here.

‘The labour problems in the garment industries have to be solved because you do not want to earn a reputation as a place where labour leaders and activists are murdered...,’ Hillary said at a question-and-answer session with students and youth leaders at International School Dhaka in the capital.

Terming ‘worrisome’ the labour problems in the garment sector, she said the country should address the issue ‘because in today’s world that will cause big manufacturers of clothing to be afraid to stay or come to Bangladesh.’ 

Students from different schools, colleges and universities and young leaders joined the session which was the last programme of her 24-hour visit to Bangladesh.

Referring to the recent murder of labour leader Aminul Islam, Hillary said that an independent investigation into his killing was needed and the perpetrators should be brought to justice...‘because, certainly, his [Aminul’s] family and friends deserve answers about what happened to him.’

Hillary said it was a real test for the government and for the society ‘to make sure that you don’t say that anyone can have impunity. That is the key issue for the rule of law.’

She said that no one should be above the law no matter how powerful they were.

‘There needs to be total rule of law with no impunity,’ she said.

Labour leader Aminul Islam went missing in April, and his body was found two days later outside Dhaka.

Hillary urged the government, garment manufacturers and labour organisations to work together so that Bangladesh remained a very important destination for foreign investors.  

To a question on Grameen Bank, the US secretary of state advised the Bangladesh government not to do anything that could undermine or affect the successes of the bank.

On the political situation here, Hillary said that she had told prime minister Sheikh Hasina and opposition leader Khaleda Zia that they needed to work together. ‘I told them I wish you could figure out ways to work together…’

A national unity was needed in Bangladesh, she said.

Students interacted with Hillary with cheers during the session that lasted about an hour from 11:00am.

Hillary was in Dhaka on a two-day official visit starting from Saturday. The two countries signed a ‘joint declaration on Bangladesh-US partnership dialogue’ creating scope for regular annual consultations at foreign minister and foreign secretary levels on bilateral issues.

Hillary, who was on a tri-nation tour of China, Bangladesh and India starting May 3, left Dhaka for Kolkata at about 12:15pm on Sunday.

It was her third visit to Dhaka after 1995 and 2000.

Source: New Age, Monday, May 7, 2012

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Cultural Organisations observe May Day today

Several organisations have chalked out elaborate programmes to mark the May Day today featuring discussions, seminars and cultural programmes.

Like the previous years, leading theatre troupe Aranyak Natya Dal has chalked out a day-long programme to observe the day, which will begin this morning on the Central Shaheed Minar premises. Intellectual-activist Badruddin Umar will attend the discussion session as chief guest.

The afternoon programme features a seminar at the Experimental Theater Hall of Bangladesh Shilpakala Academy in which economist Anu Mohammad, New Age editor Nurul Kabir, general secretary of Shammilito Sanskritik Jot Hasan Arif, among others are scheduled discussants.

Aranyak Natya Dal will also stage its popular production Raarang, written and directed by Mamunur Rashid, at the same venue in the evening.
Through the murder of a Santal leader named Alfred Shoren, Raarang features the ongoing oppression on the ethnic minority groups by the dominating Bangali community.

Cultural personality Kamal Lohanai as chief guest inaugurated the programme titled May Dibash O Ganasangeet Anushthan. Shammilito Shanskritik Jot vice president Golam Kuddus, general secretary of SSJ Hasan Arif, secretary general of Bangladesh Group Theatre Federation Jhuna Chowdhury, among others delivered speeches at the programme.

Source: The New Age, Tue, 01/05/2012

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Bangladeshi apparel gains from China’s rising costs

Western brands such as H&M, Wall Mart, Gap and Next buy their clothes from Bangladesh

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

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