Home ›› 07 Feb 2022 ›› Editorial
Bangladesh’s garment sector has every prospect of remaining one of the world’s largest RMG manufacturers, and continuing its impressive story of growth and improvement. However, the country’s apparel industry is facing headwinds, and will need to take decisive action in several areas if it is to prosper. It will need to rise to the challenges of competing without preferential trade access; meeting decreased demand from traditional customer markets; and making a fundamental shift toward a demand-driven and more sustainable sourcing model. Some of the international buyers we spoke to believe the industry is not moving fast enough in this direction. Others are more positive: they feel that, given the resilience and adaptability Bangladesh’s manufacturers have shown in the past, the RMG industry will be able to navigate the necessary transformation, though structural changes will be inevitable. As Bangladesh celebrates 50 years of independence, global attention is focused on the remarkable economic and social progress the country has achieved in recent decades. Even with the setbacks of the Covid-19 pandemic, the South Asian nation is on track to become a middle-income country within the next few years. The ready-made garment (RMG) industry is a mainstay of this economic success story: Bangladesh is today one of the world’s largest garment exporters, with the RMG sector accounting for 84 per cent of Bangladesh’s exports. This comes on the back of the sector’s rapid growth and modernisation over the past decade as well as the strides it has made in improving conditions for the country’s approximately four million garment workers.
However, the pandemic has stalled the sector’s progress at a crucial moment, just as global shifts in fashion sourcing threaten Bangladesh’s position in industry supply chains. Ten years ago, in 2011, we published our report, Bangladesh’s Ready-made Garments Landscape: The Challenge of Growth, for which we had collaborated with the Bangladesh German Chamber of Commerce and Industry. With this article we want to take stock of Bangladesh’s RMG sector—examining its growth to date, highlighting the big challenges it has navigated since then, and suggesting the transformative steps that are needed if the sector is to maintain and renew its economic vibrancy in the decade ahead. To support this stocktaking we have conducted a series of interviews with sourcing executives of leading global fashion brands and retailers in a year which presented few reasons to be happy, the garment workers of Sindh province in Pakistan had cause to celebrate.
The provincial government had just announced a 40 per cent increase to the minimum wage, raising it from 17,000 to 25,000 rupees per month. Although still well below living wage levels, the hike was an urgently needed step up from the poverty pay that left workers struggling to survive during the pandemic. A government-ordered increase should have been water-tight, immovable. It should have guaranteed workers enough money to feed their families and pay their rent. However, progress in the garment industry is fragile. Now, half a year later, the promised wage increase has still not materialised. Factory owners, squeezed by brands’ desire for ever-cheaper production and fearing that they wouldn’t be able to meet the higher labour costs, banded together to appeal against the order.
The Sindh Supreme Court is in the process of making a final judgment and a decision is expected later this month. In the meantime, workers continue to be paid barely enough to live and are owed six months of a 40 per cent wage increase. This is wage theft on a huge scale, yet the garment brands sourcing wares from the province, including Gap, H&M, C&A, Aldi Nord, Bestseller, Levi’s and Fruit of the Loom, have stayed silent. The brands are knowingly allowing systematic theft to continue in their supply chains, going against their self-professed desire to see workers paid a decent wage. Sindh is one of Pakistan’s two main garment-producing hubs, second only to the Punjab region. The textile and apparel industry is the second largest employer in Pakistan and comprises 60 per cent of all exports. But despite its importance to the economy, wages in the province have historically been at poverty levels. This, combined with high inflation in recent years, rising to 12.3 per cent in December 2021, and significant challenges arising from Covid-19, including unpaid wages, has left many workers unable to afford the basic necessities of life. In an industry built on exploitation, the announcement of a significant wage increase in response to workers’ struggle represented hope, not just for the workers of Sindh, but for garment workers everywhere. It was recognition that the industry norm is unsustainable, a fact not altered by brands’ over-use of the word ‘sustainable’ in efforts to sell more clothes. There can be no true empowerment without financial empowerment, and paying a woman a living wage gives her choices about her and her family’s future that remain beyond her grasp on the dominant wages in the industry.
Gap and other brands have a perfect opportunity to help workers ‘uplift themselves’ by engaging with their suppliers and taking clear action to ensure the legal minimum wage is paid in both Sindh and Karnataka. Paying a living wage should not be optional nor seen as a CSR officer’s pet project. It should be a fundamental requirement for running a business. Brands could take a key role in advancing workers’ rights by telling their suppliers to reflect the increase to wages in the product costs charged to them. This would have a negligible impact on their profits, but would give their suppliers the confidence to continue production in the province while paying the legally set minimum wage. Brands should also commit to working with suppliers and trade unions to develop a sustainable system for annual wage increases, thereby actively working towards a living wage. And they should be transparent in the steps they are taking to prioritise workers’ rights and ensure decent work. This is an opportunity for brands to show that their codes of conduct and business-led initiatives have meaning. Several sourcing executives we spoke to for this article highlighted the progress that Bangladesh’s RMG sector is making in diversifying and upgrading its product offerings. For instance, there is now greater capacity to produce garments made from synthetic fibers; manufacture more complex products such as outerwear, tailored items, and lingerie; and provide new washes, prints, and laser finishing’s. Entry into these new segments has been supported by the changing rules of origin for preferential trade with the EU, allowing for the use of imported fabrics.
So, it is a great opportunity for Bangladesh. By increasing investment in non-cotton apparel, we can capture market share as we have captive market and skilled labour. Till now Bangladesh manufacture only low-end product, but now investor look for high end item. If we upgrade our factories with latest technology and staff with sound technical knowledge, we can have huge investment in high-end product. Another opportunity is rising production cost in china and they are shifting to high value good. Now it is a great opportunity for Bangladesh to take the shifting order. Bangladesh textile industry has very bright future with its robust demand in garment sector. But it is true that there are some challenges that Bangladesh has to face to survive in this sector. From an agriculture-based economy to today’s export- import oriented economy Bangladesh came a long way. With the help of nearly 40-year-old apparel and garment industry Bangladesh raised its foreign reserve from 270 million$ to 33000 million$. Still there is lot of opportunities for Bangladesh to grow at its full potential. But today’s textile industry is more competitive than any other time. For this reason, Bangladesh will face some challenges. By solving those problems Bangladesh can creating a technology-based garment industry and can became the leader of this sector. As it is a country which is full of huge youth population. So we can say that Bangladesh has bright future in textile and apparel industry. There also has been some increase in vertical integration of the supply chain, with the result that more suppliers are now able to offer lead times below the standard 90 days. However, many of Bangladesh’s factories have not yet transitioned to providing these new offerings, and have shied away from the investment required to do so.
Bangladesh’s RMG sector has achieved impressive growth and transformation over the past decade, overcoming significant obstacles along the way. Today, however, it faces a new set of challenges, amid a global pandemic and a shifting global apparel-sourcing market. In the years ahead, the industry will need to embrace a more holistic transformation, in partnership with manufacturers, international buyers, worker representatives, the government, and other stakeholders. As international buyers navigate the rapidly changing environment, they are tasked to work with more advanced suppliers to develop demand-driven, more sustainable supply chains. To do so, they will need to build deeper, truly strategic partnerships, while pushing to overcome the past decades’ deflationary dynamics in global apparel retail markets.
The writer is a researcher based in the UK raihan567@yahoo.co.uk
