Faculty of Engineering > Textile Engineering

Bangladesh Garments: Crisis and Challenges

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Md. Fouad Hossain Sarker:
According to Oxfam USA, an average tariff rate on imports into the US is 1.7%. France, UK and Saudi Arabia pay less than 1%. But for Bangladesh it is on average 16%. Bangladesh pays nearly 60% of all the tariff revenue by the US collected from the LDCs.  Even International Monetary Fund (IMF) admits that, 'poor countries like Bangladesh—face the highest effective tariffs, on average, four or five times those faced by the richest economies' in the USA.   

Md. Fouad Hossain Sarker:
The import duties on Bangladesh's apparel exported to the US in 2012 were equivalent to about $750 million (incidentally this is several times more than the US annual bilateral 'aid' to Bangladesh in many years). Ambassador Terry Miller and Ryan Olson of the US correctly argued that, 'this move (to suspend GSP facility) is punitive and off-target. In reality, the GSP covered only 118 products and $34.7 million in imports from Bangladesh in 2012. This is less than 1 percent of the $5 billion in total imports that Bangladesh ships to the U.S. each year. In particular, it will have little effect on the garment industry, which is largely exempt from GSP duty-free status.'Therefore, not only the action on GSP was misleading, it was fraudulent too. If the US accepts WTO principles and stop discrimination and protectionism, Bangladesh would have more leverage to incentivize change within the industry. Rather it has been used to pursue other agenda of the US. Later in the year, the governments of Bangladesh and the USA signed TICFA (Trade and Investment Cooperation Framework Agreement), 'to find a platform to negotiate for reinstating GSP facility'! It must be noted that, the US did nothing to 'punish' the brand and retailers in the US like Wal-Mart, who has the biggest shares of responsibility for workers vulnerability.

Therefore, the global net of injustice allows factories owners, BGMEA, and global retailers to avoid responsibility, even after the murder of thousands. This shows a failed system of accountability in global scale.

Md. Fouad Hossain Sarker:
Minimum wage and compensation: still unresolved New scale of wages was declared on November 21, 2013. Minimum wage was fixed at Tk 5300 against the demand of Tk 8000 in the new scale. Although new wage appears as an increase over the wage scale of 2010 in nominal terms, it remains the lowest in the world and below the poverty level of income of a single person and less than one third of that for three members' family. Nevertheless, owners are still opposing this scale; they are pushing for much lower. After Rana Plaza disaster we have seen many conferences, seminars, consultations, meetings around the world. These were organized to find solutions regarding safety in Bangladesh garment industry and compensation of the families of the dead and the injured. But till the end of the year there was no declaration of compensation for the victims, not even any policy in this regard was formulated. There were series of workers protest rally demanding minimum wage and security, and for compensation over the year. Sporadic violence occurred between workers and police, at least two workers were killed by police in Savar industrial area in November. In fact, to save the millions of workers and to capture the huge potential of the industry what we need is a comprehensive plan and effective agencies to implement it. That plan must include time bound necessary steps-

(1) to ensure payment of compensation to the families of the killed, not less than their lifetime possible earning, and to the injured to compensate their lifetime inability to earn;

(2) to ensure exemplary punishment to those who are responsible for the disaster;

(3) to ensure security of the work place and sustainability of the sector, to develop national capability;

(4) to fix national minimum wage at living wage level (must be higher than the poverty level of income) and to work for establishing a global minimum wage.

(5) to ensure the right to organize.

(6) to constitute a regulatory body to monitor global chain so that trend of price cut and cost cut is removed.

Source: Anu Muhammad (2014). Bangladesh garments: Crisis and challenges. The Daily Star. New Year Special-2014. Accessed from http://www.thedailystar.net/new-year-special-2014/bangladesh-garments-crisis-and-challenges-4797

drkamruzzaman:
Nice post on Garments sector.

nadimhaider:
very informative & reliable. i know how hard u work to do this.

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