Originally posted in The Business Standard on 3 February 2022
Realising the ground realities, Bangladesh must prepare itself for compliance-driven production and market practices, says Dr Debapriya Bhattacharya
Currently, labour rights compliance at the production stage is given priority by global consumers, and now they are expressing concerns about many more issues including environmental and broader social aspects of manufacturing.
These concerns are no more exclusively focused on exportable products and these are now involved with backward and forward linkage activities. Awareness in environmental and social compliance would have a visible impact on the full supply chain as well as on the macro-economic policies of the exporting countries.
While these issues earlier dominated the European markets, now the USA market is also getting involved. Indeed, the concepts of compliance and accountability, informed by the Sustainable Development Goals (SDGs), are becoming hallmarks of the export markets.
Realising the ground realities, Bangladesh must prepare itself for compliance-driven production and market practices. However, this will entail additional costs of production and supply.
Since the export markets are essentially “buyers’ markets”, the country has to largely internalise these costs through improved labour productivity, strengthened infrastructural and logistical services and policy support.
Entrepreneurs should not panic and face this challenge constructively and competitively, as a step in the incremental progress of our economy in line with global trends. Facing the challenge successfully would help Bangladesh to avoid the so-called middle-income trap.
Dr Debapriya Bhattacharya
Distinguished Fellow, CPD, and former Bangladesh Ambassador to WTO