Fashioning its future: Reforms needed in Bangladesh’s apparel industry

The world’s second-largest ready-made garment exporter is set to make bigger strides with new reforms to boost its apparel industry.
05 September 2019

Inside a garment factory in Dhamrai, northwest of the Bangladeshi capital of Dhaka, a computerized sewing machine churns out batches of women’s designer tops every minute.

An automated trimming system nearby cuts away excess cloth before employees meticulously conduct quality inspections at their respective work stations.

This modern factory is just one of the country’s 4,500 apparel manufacturing plants that exported more than US$30 billion (€26.3 billion) worth of clothing to major global retailers in 2018.

Over the past decade, Bangladesh has made a name for itself as a powerful player on the global garment manufacturing stage.

The apparel industry is the backbone of the country’s economy, making up almost 12.36 percent of its total gross domestic product, and employing as many as 40 million workers. It accounted for nearly 80.5 percent of its total merchandise exports in 2018.

Behind its exceptional market performance, Bangladesh’s capacity for producing high volumes of low-cost garments for Western retailers has repeatedly come under public scrutiny.

Global brands with operations in the country have also frequently come under fire by human rights organizations championing the rights of workers who endure poor wages and dangerous working conditions.

Driven by both government initiatives and technology, the sector has been slowly reinventing itself.

How the Rana Plaza collapse changed everything

The turning point came in 2013, after tragedy struck the town of Savar, a 30-kilometer drive from Dhaka, where the eight-story Rana Plaza garment factory collapsed due to structural issues. More than 1,100 people lost their lives, while another 2,500 workers were seriously injured.

The Rana Plaza collapse

Bangladesh’s worst modern-day industrial disaster put its garment industry in the global spotlight and brought it to a standstill.

To protect its US$30.61 billion ready-made garment industry, the government moved swiftly. It roped in over 180 global retailers, importers and trade unions to draw up the Accord on Fire and Building Safety in Bangladesh (Accord) — a five-year plan to improve working conditions in garment factories across the country.

Six years on, the safety body has inspected over 2,000 factories, while helping to remedy workplace hazards that range from poor building structures to toxic emissions, as well as overcrowded working conditions.

Perhaps the best outcome of the five-year plan was the introduction of employee-initiated watchdog programs, which have empowered workers to blow the whistle on negligence and hold factory owners accountable.

For Rob Wayss, executive director of Accord, things are looking up for Bangladesh’s clothing industry in terms of safety. “I think right now, of the developing countries with a ready-made garment sector, Bangladesh is the safest,” he said, in a 2018 interview with The Guardian.

Still, these efforts to improve safety so far could come to naught if the Bangladesh government insists on halting the operations of Accord after failed negotiations.

The apparel industry is the backbone of the country’s economy, making up almost 12.36 percent of its total GDP.

Dangerous working conditions aside, low wages have also been a major factor that has stirred unrest among garment workers in the country.

Most of the workers’ feedback go unheard because of the fear of reprisals and intimidation against union members, who are often seen as threats by business owners.

Frustrations boiled over when the government announced an unsatisfactory minimum-wage hike in January 2019 — up to 50,000 garment workers took part in demonstrations that turned violent, leaving one dead, 50 injured and causing more than 5,000 workers to lose their jobs.

Grand ambitions

Despite the negative press and the issues plaguing Bangladesh’s dominant garment industry, the country is still flourishing.

As an economy that is largely powered by textile and garment exports, Bangladesh celebrated a historic moment in 2018 when it achieved the status of “developing country” from “least developed country”.

The South Asian nation has set an ambitious goal for its next phase of growth: to reach upper-middle-income country status by 2021, to be led by a nationwide push in manufacturing.

In line with this, it has also set a target for apparel exports to hit US$50 billion by 2021. So far, the signs have been encouraging.

On the whole, exports have soared by an average annual rate of 15 to 17 percent in recent years to reach a record US$36.7 billion for the year through June 2018.

Further growth in the apparel industry would unlock more opportunities in logistics, as Bangladesh continues to export to retailers all across the world.

Apparels made up 90 percent of the business’ total exports from Bangladesh in 2018, according to Fabian Rybka, Cluster Head, DHL Global Forwarding Bangladesh and Sri Lanka.

“The growth of the export industry, despite a slowdown in many neighboring states, bodes well for Bangladesh’s economy in general,” said Rybka. “Bangladesh has continued to remain extremely competitive in the international market, exporting quality products at inexpensive prices.”

For Bangladesh to continue as a manufacturing powerhouse, however, it needs to rely on the support from other countries and the major global brands investing in the country.

Pressing reforms are therefore essential to ironing out the welfare of the country’s garment workers. Only then can Bangladesh fashion the future of its apparel industry into one that is not only profitable, but also ethical and responsible.

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