Published in German Media – Spiegel on Monday 11 May 2020
Corona crisis in Asia
At the end of the supply chain
A million RMG worker in Bangladesh have lost their jobs since the shops in Europe had to close. Now they want to produce again. The workers have to choose between starvation and risk of infection.
Salma Akhter first learned of the virus in the textile factory. She was sitting on her sewing machine on the second floor and sewing zippers in pants: “Wash your hands with soap”, she remembers the loudspeaker announcement by a manager: “A virus from China has arrived in Bangladesh”.
The workers soon received further warnings. You should not take off the masks in the factory. Before starting work, she and the other employees were sprayed with disinfectant. But it wasn’t until March 26 that the 24-year-old Akhter felt the consequences of the pandemic firsthand: the factory in which she had worked until then, had to close. A few weeks later, she received the notice of termination by mobile messaging.
She is sitting on her bed in her two-room apartment; a flowered face mask hangs from her headscarf. She has almost no savings. “How are we supposed to survive now?” She asks. “I have to pay my rent, we have to eat”.
Textile giants like C&A and Zara have cancelled orders worth billions
Akhter lives in Gazipur, an industrial city with more than one million inhabitants. There are hundreds of textile factories here. Tens of thousands of workers sew here for the whole world, including German customers – and at a price that would never be possible in Europe.
For many years, Bangladesh lived from the promise of globalization in its simplest form: rich countries get cheap goods; people in poor countries in return have an income. But since Corona, the old deal no longer applies.
Europe’s shopping streets were deserted for weeks in many places. Clothing stores are still closed or may only let a limited number of customers into the store. The industry is facing losses in sales and layoffs and in many cases seems to have decided to pass down the economic pressure: In Bangladesh alone, foreign companies have canceled or suspended orders worth three billion euros in recent weeks. These include textile giants such as Primark, C&A and the Spanish company Inditex, which includes the Zara brand. Akhter also sewed hems and zippers for the Spaniards.
And even companies that have remained loyal to their suppliers could in future order fewer goods from abroad. In countries where the lockdown is currently being eased, demand is only slowly picking up again. Because even those who are allowed to shop again may not be able to afford shopping. German companies have registered short-time work for more than ten million employees. 33 million Americans have registered as unemployed in the past seven weeks.
Akhters monthly wage: just under 105 euros
But it is the weakest in the supply chain – women and Akhter – who have been hit hardest: an estimated one million of the four million textile workers in the country have lost their jobs in the past few weeks. Hundreds of thousands of workers in the textile factories of Cambodia, Myanmar and India share their fate.
For Alexander Kohnstamm, head of the Fair Wear Foundation, a fundamental problem of the global textile industry comes to light in the crisis: “Too many in the industry have relied on a business model that relies on high quantities and small margins. Now the reserves are lacking to to survive the crisis.” This applies to the large clothing chains in Europe as well as to factory owners in Bangladesh. The workers would suffer the most. Because, unlike employees in Germany, they could neither rely on savings nor on the state.
Dr Khondaker Golam Moazzem has a similar view. The research director of the Center for Policy Dialogue think tank in Dhaka says: “Most RMG workers are having major financial difficulties right now. They will be dependent on government food packages.”
Akhter, for example, received her last salary in cash in mid-April; 9800 taka, just under 105 euros. This corresponds to the minimum wage, but is just enough to pay for your rent and food. She has no savings. “We hardly have any money left for soap to protect ourselves at home,” she says. A bar of soap costs 40 taka, a good 40 cents.
The German Federal Ministry for Economic Cooperation and Development has asked companies “to assume their responsibility for employees in the suppliers and along the entire supply chain even during the crisis”. Companies such as Otto and Tchibo have already committed to participating in a federal government textile aid fund, a spokesman explains on request. They want to support factories in converting production to protective masks. In addition, the Bangladesh government is currently coordinating a participation in the national aid program, which provides for continued wages for employees in the textile sector. Prime Minister Sheikh Hasina’s government had pledged nearly $ 590 million in government aid to factory owners in late March, to pay the workers wages. The desired success failed to materialize: according to a survey by the BRAC University in Dhaka, almost half of the workers had not received any wages in the first two weeks of April.
People go hungry, diseases increase
The textile industry has brought great suffering to Bangladesh before. The Rana Plaza building collapsed almost exactly seven years ago, and more than a thousand people died, most of them seamstresses. But the factories have brought new prosperity to Bangladesh. Many of the social advances in the country can also be traced back to the textile industry, in which women in particular have found work and thus always gained some power: Today, women in Bangladesh work as often as men. The child rate has dropped from six to almost two in the past 40 years, while mean life expectancy has increased from 53 to 72 years. Bangladesh is one of the few developing countries where more girls go to school than boys. “Single parents and housewives have also found work in the textile industry. The job has changed our lives,” says Akhter. “If the factories close, all these women will die without food.”
Bangladesh’s textile industry is the second largest in the world after China. The industry recently generated around $ 40 billion, accounting for 84 percent of the country’s total exports and 13 percent of its gross domestic product, and is the engine of the economy. This last grew by eight percent annually; According to a World Bank forecast, however, it could only be two percent this year. The lockdown imposed by the country for fear of Covid-19 further exacerbates the situation in the country: hunger and unemployment have increased; Diseases that are actually easy to treat are on the rise.
The economist Moazzem believes it is possible “that the textile industry will recover in half a year or a year”. It was the same during the financial crisis. Back then, the demand for cheap textiles rose again within a short time – and Bangladesh was the country that could produce cheaply.
But Bangladesh has to do just that: produce again. In order to prevent the spread of the new corona virus, all factories had to close temporarily. Even if demand is low, many owners believe that they cannot afford to keep their factories closed. Textile manufacturers in countries like Vietnam and China, which seem to have weathered the worst of the pandemic for now, are attracting customers. Bangladeshi entrepreneurs are concerned about the worrying about what designated Fair Wear Head Kohnstamm as “traveling circus”: corporations, who move with their jobs from one country to another, always the cheapest price afterwards.
“Brutal dilemma”: Now the factories are supposed to open again
The authorities have already asked the more than 4,000 factories in the country to reopen as soon as possible . The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has issued guidelines that are intended to guarantee the safety of workers during the pandemic: For example, the seamstresses should keep their distance from each other, wear a face mask and wash their hands regularly. However, the question is, says Kohnstamm: “Are the new standards also being followed?”
Entrepreneurs under financial pressure could decide that security is something they can’t – or don’t want – afford. They would not have much to fear: they do not have to expect controls because they are currently prohibited. The authorities fear that a possibly infected examiner will carry the virus from factory to factory.
Rubana Huq, the president of the BGMEA, called the situation a “brutal dilemma”: If the factories were closed, people could literally starve. When the factories open, people also die. The number of new corona infections has risen rapidly in Bangladesh for a few weeks now, and apparently especially in the slums around the factories.
But more than the virus, workers like Akhter fear a future without work. The backyard complex, which she shares with eight families, is an ideal place for an infection to spread.
You and about 30 people share two kitchens and two toilets there. Colorful neighbors’ towels and T-shirts dry in the courtyard. The 24-year-old has been working in the textile industry since around the age of 16. In fact, it is not difficult for experienced and experienced workers like her to find a new job, she says. “But who’s hiring people now?”
Now that the factories have reopened, she still wants to try.