Published in Dhaka Tribune on Sunday, 2 March 2014.
Making the right changes
Tanbir Uddin Arman
Bangladesh is known in the global market as a small country with a strong presence due to its thriving RMG sector
RMGs serve as the flagship products of our country, increasing people’s interest in Bangladesh both as tourist and investment destinations. The sector does occupy a wide area of the Bangladesh economy, and a distinct position in the global market as well.
Bangladesh is known in the global market as a small country with a strong presence due to its thriving RMG sector. As per the report of BGMEA, the country has around 5,600 active garment factories employing nearly 4 million people directly.
Also, it continues to show a robust performance and competitive strength in the global market. In FY2012-13, the RMG sector earnings stood at $21.52bn out of US$27.09bn total export earnings as per the report of Export Promotion Bureau (EPB). RMG’s contribution to total exports in 2013 was 79.63%, with an increase of 1.03% from total exports in 2012.
However, the sector is still undergoing some troubles at home and abroad despite its tremendous successes over the last few years. In recent times, the sector has fallen into an image crisis in the global platform after the events of the Tazreen Fashions fire and Rana Plaza building collapse.
Disputes between factory owners and workers over wage standards also impede the success of the sector. Both sides have yet to reach a consensus on minimum wage standards of workers, even though some initiatives have been taken vis-à-vis settling disputes.
Inadequate infrastructure, deficiencies in upgraded technology, and a lack of training measures for workers are also stymieing the sector. Most factories still lack clean working environments and sound sanitation systems, making workers sick.
A platform of 26 North American clothing retailers has expressed concerns over the structural flaws of many garment factories during their recent inspection of some 200 factories. As per the report of the inspection, about 74% of the garment factories were built before the establishment of the Bangladesh National Building Code 2006. Most factories are still deficient in having adequate fire extinguishers, emergency exits, and other safety measures that are all-important in times of accidents.
Aforementioned problems aside, political topsy-turvydom is another impediment to the progress of the sector. It cost this sector around Tk250 crore each day of the shutdown in the pre and post phases of the 10th National Parliament Election.
As per the report of Centre for Policy Dialogue, more than Tk10,000 crore was drained away from this sector in last year’s political turmoil. The sector has recently come under some hassle out of the cancellation of GSP facility by the US government on the questions of poor safety and working conditions of workers inside the factories.
Due to the removal of the GSP facilities, Bangladeshi exporters are now to pay 15.3% duty to enter US markets, which again would be a reason for keeping the factory-owners away from reaching a consensus on minimal wage of Tk8,000 for each worker.
So, in the final analysis, it is recommended that, not just for the restoration of the facility, but also to make our RMG sector of international standards and thus further entice foreign retailers into buying our products, all necessary initiatives have to be made vis-à-vis workers’ safety and their rights.
Due consideration should be given to their issues, as they are an inseparable part of the operation of factories. Workers should be provided with essential training so that they can produce larger amounts of quality products in shorter amounts of time, and factory owners ought to be willing enough to spend an amount of their earned profits in this connection.
Furthermore, structural transformation along with technological upgrading is a must for the amelioration of factory environments to stave off disasters. Factory buildings built before the BNBC need to be retrofitted, or constructed anew where the possibility prevails.
The government, accompanied by owner associations – BGMEA and BKMEA – can jointly play a substantial role in establishing more “planned-industrial zones” to accommodate and consolidate factories away from residential areas and cities.
Last but not least, political stability is a pressing need in order to keep the RMG sector operating smoothly at home and abroad. Political parties should forfeit violence and inter-party conflicts, at least for the sake of the country’s economic growth.