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The garment industry of Bangladesh has been the key export division and a main source of foreign
exchange for the last 25 years. At present, the country generates about $5 billion worth of products
each year by exporting garment. The industry provides employment to about 3 million workers of
whom 90% are women. Two non-market elements have performed a vital function in confirming the
garment industry's continual success; these elements are (a) quotas under Multi- Fibre Arrangement1
(MFA) in the North American market and (b) special market entry to European markets. The whole
procedure is strongly related with the trend of relocation of production.
Garment industry is controlled by the transfer of production. The globalisation of garment production
started earlier and has expanded more than that of any other factory. The companies have transferred
their blue-collar production activities from high-wage areas to low-cost manufacturing regions in
industrialising countries. The enhancement of communication system and networking has played a
key role in this development. Export-oriented manufacturing has brought some good returns to the
industrialising nations of Asia and Latin America since the 1960s. The first relocation of garment
manufacturing took place from North America and Western Europe to Japan in the 1950s and the
early 1960s. But during 1965 and 1983, Japan changed its attention to more lucrative products like
cars, stereos and computers and therefore, 400,000 workers were dismissed by Japanese textile and
clothing industry. In impact, the second stock transfer of garment manufacturing was from Japan to
the Asian Tigers - South Korea, Taiwan, Hong Kong and Singapore in 1970s. But the tendency of
transfer of manufacturing did not remain there. The rise in labour charge and activeness of trade
unions were in proportion to the enhancement in economies of the Asian Tigers. The industry
witnessed a third transfer of manufacturing from 1980s to 1990s; from the Asian Tigers to other
developing countries - Philippines, Malaysia, Thailand, Indonesia and China in particular. The 1990s
have been led by the final group of exporters including Bangladesh, Srilanka, Pakistan and Vietnam.
But China was leader in the current of the relocation as in less than ten years (after 1980s) China
emerged from nowhere to become the world's major manufacturer and exporter of clothing.
The presented information reveals that the tendency of low labour charges is the key reason for the
transfer of garment manufacturing in Bangladesh. The practice initiated in late 1970s when the Asian
Tiger nations were in quest of tactics to avoid the export quotas of Western countries. The garment
units of Bangladesh are mainly relying on the 'tiger' nations for raw materials. Mediators in Asian
Tiger nations build an intermediary between the textile units in their home countries, where the
spinning and weaving go on, and the Bangladeshi units where the cloth is cut, sewn, ironed and
packed into cartons for export. The same representatives of tiger nations discover the market for
Bangladesh in several nations of the North. Large retail trading companies placed in the United States
and Western Europe give most orders for Bangladeshi garment products. Companies like Marks and
Spencers (UK) and C&A (the Netherlands) control capital funds, in proportion to which the capital of
Bangladeshi owners is patience. Shirts manufactured in Bangladesh are sold in developed nations for
five to ten times their imported price.
Collaboration of a native private garment industry, Desh Company, with a Korean company, Daewoo
is an important instance of international garment chain that works as one of the grounds of the
expansion of garment industry in Bangladesh. Daewoo Corporation of South Korea, as part of its
global policies, took interest in Bangladesh when the Chairman, Kim Woo-Choong, offered an
aspiring joint venture to the Government of Bangladesh, which included the growth and process of
tyre, leather goods, and cement and garment factories. The Desh-Daewoo alliance was decisive in
terms of getting into the global apparel markets at significant juncture, when import reforming was
going on in this market following the signing of MFA in 1974. Daewoo, a South Korean leading
exporter of garments, was in search of opportunities in nations, which had hardly used their quotas.
Due to the quota restriction for Korea after MFA, the export of Daewoo became limited. Bangladesh
as an LDC got the chance to export without any constraint and for this cause Daewoo was concerned
with the use of Bangladesh for their market. The purpose behind this need was that Bangladesh would
rely on Daewoo for importing raw materials and at the same time Daewoo would get the market in
Bangladesh. When the Chairman of Daewoo displayed interest in Bangladesh, the country's President
put him in touch with chairman of Desh Company, an ex-civil servant who was seeking more
entrepreneurial pursuits.
It is claimed that the Desh-Daewoo alliance is a significant element for the growth and achievement
of Bangladesh's entire garment export industry. After getting linked with Daewoo's brand names and
marketing network, overseas buyers went on with buying garments from the corporation heedless of
their origin. Out of the opening trainees most left Desh Company at several times to erect their own
competing garment companies, worked as a way of moving knowledge all through the whole garment
sector.
It is essential to identify the outcomes of the process of moving production from high pay to low pay
nations for both developing and developed nations. It is a bare fact that most of the Third World
nations are now on the way to industrialisation. In this procedure, workers are working under
unfavourable working environment - minimal wages, unhealthy place of work, lack of security, no job
guarantee, forced labour etc.
The route of globalisation is full of ups and downs for the developing nations. Relocations of
comparatively mobile, blue-collar production from industrialized to developing nations, in some
circumstances, can have troublesome effects on social life if - in the absence of efficient planning and
talks between international organisations and the government and/or organisations of the host nation -
the transferred action encourages urban-bound relocation and its span of stay is short. Another
negative result is that the rise in employment and/or income is not expected to be satisfactorily large
and extensive to lessen inequality. In connection with the negative results of relocation of
manufacturing on employment in developed countries, we realize that in comparatively blue-collar
industries, the growing imports from developing nations lead to unavoidable losses in employment. It
is held that development of trade with the South was a significant reason of the disindustrialisation of
employment in the North over past few decades.
After all employees who are constantly working under unfavourable circumstances have to bear the
brunt. Work is under-control across the Bangladesh garment sector. Appalling working atmosphere
has been brought to light in the Bangladesh garment industry.
The garment sector is disreputable for fires, which are said to have claimed over 200 lives in the past
two years, though exact figures are tough to find. A shocking instance of absence of workplace safety
was the fire in November 2000, in which almost 50 workers lost their lives in Narsingdi as exist doors
were closed.
From the above analysis of working atmosphere of garment sector, we can state that the working
environment of most of the Third World nations, particularly Bangladesh remind us of earlier
development of garment industries in the First World nations. The state of employment in many (not
necessarily) textiles and clothing units in the developing nations take us back to those set up in the
nineteenth century in Europe and North America. The mistreatment of garment employees in the birth
period of the development of US garment factories reviewed above is more or less same as it seen
now in the Bangladesh garment industry. Can we state that garment employees of the Third World
nations living in the 21st century? Is it a return of the Sweatshop?
In a way, the Western companies are guilty of pitiable working atmosphere in the garment sector. The
developed nations want to make more profit and therefore, force the developing nations to cut down
the manufacturing cost. In order to survive in the competition, most of the developing nations select
immoral practices. By introducing inflexible terms and conditions in the business, the global economy
has left few alternatives for the developing nations.
Another method is to adopt best system or ethical course. Those companies, which react to heightened
competition by stressing quality, speedy answer of the customers, fair practices for labourers should
have the most innovative practices. We think that we are now living in the age of competition in
producing improved quality over cost-reduction policy. The objective of change efforts at the
workplace has been modified over the time - from making the job humane in the 1960s, to job
satisfaction and output in 1970s, to quality and competitiveness in the 1980s. It is necessary for a
company to pursue a competitive policy that improves quality, flexibility, innovation and customer
care. If they rely on low costs by dropping labourers' wages and other services, they will be bereaved
of labourers' dedication to work.
Strength
. Considerable Qualified/keen to learn workforce available at low labour charges. The recommended
minimum average wages (which include Travelling Allowance, House Rent, Medical Allowance,
Maternity Benefit, Festival Bonus and Overtime Benefit) in the units within the Bangladesh Export
Processing Zones (BEPZ) are given as below; on the other hand, outside the BEPZ the wages are
about 40% lower:
. Easily accessible infrastructure like sea road, railroad, river and air communication
. Accessibility of fundamental infrastructure, which is about 3 decade old, mainly established by the
Korean, Taiwanese and Hong Kong Chinese industrialists.
. GSP under EBA (Everything But Arms) for Least Developed Country applicable (Duty free to EU)
. Looking forward to Duty Free Excess to US, talks are on, and appear to be on hopeful track
. Investment assured under Foreign Private Investment (Promotion and Protection) Act, 1980 which
secures all foreign investments in Bangladesh
. OPIC's (Overseas Private Investment Corporation, USA) insurance and finance agendas operable
. Adjudication service of the International Centre for the Settlement of Investment Dispute (ICSID)
offered
. Excellent Tele-communications network of E-mail, Internet, Fax, ISD, NWD & Cellular services
. Weakness of currency against dollar and the condition will persist to help exporters
. Readiness of new units to enhance systems and create infrastructure accordant with product growth
and fast reactions to circumstances
Weakness
. Lack of marketing tactics
. Low acquiescence: there is an international pressure group to compel the local producers and the
government to implement social acquiescence. The US GSP may be cancelled and purchasing from
US & EU may decrease significantly
. M/c advancement is necessary. The machinery required to assess add on a garment or increase
competence are missing in most industries.
Opportunity
. EU is willing to establish industry in a big way as an option to china particularly for knits, including
sweaters
. Bangladesh is included in the Least Developed Countries with which US is committed to enhance
export trade
. Sweaters are very economical even with china and is the prospect for Bangladesh
. If skilled technicians are available to instruct, prearranged garment is an option because labour and
energy cost are inexpensive.
. Foundation garments for Ladies for the FDI promise is significant because both, the technicians and
highly developed machinery are essential for better competence and output
. Japan to be observed, as conventionally they purchase handloom textiles, home furniture and
garments. This section can be encouraged and expanded with continued progress in quality
Threat
. The exporters have to prepare themselves to harvest the advantages offered by the opportunities.
The central bank and the government seem to have a view that
everything will come back quickly and we can expect full
recovery by 2021. We all hope that turns out to be accurate, but
most thinking about the way back is less optimistic.
Short-term challenges
What are the challenges of the next two years? First, rebuilding
the supply capacity in the face of constraints operating within the
factories. These constraints effectively reduce the production
rate.
Fabric from India cannot enter the country through Benapole and
one cannot know when the Indian authorities will open the
border. Supply chains from China are struggling to get started;
some US buyers are skeptical about using Chinese fabrics and
may insist on sourcing to other countries.
Bangladesh does not need the human loss or the bad publicity of
a major outbreak of Covid-19 among workers. Inevitably there
will be many workers who become ill; it is important for the
industry to maintain the protection measures.
In FY2019 imports from China were more than $3bn for major
items. The diversification of fabrics and yarns required is a
consequence of making garments with higher domestic content.
The development of the backward linkage textile mills almost
doubled the impact of the sector in raising GDP after 1998; the
domestic content can be raised again by a serious effort to
produce the fabrics and yarns the industry needs.
The existing textile plants must be given the opportunity to
undertake serious upgrading of their production methods to
reach the quality and diversity needed. Bangladesh Bank and the
government must have some program to achieve this. Technical
experts are needed to prepare the upgrades.
These are complicated issues and the major RMG factories that
are now importing fabrics and specialized yarns need to be
consulted. Ultimately it is the foreign buyer who is going to
accept the local fabric, making consultation and cooperation an
important part of the upgrading.
Upgrading many textile plants will call for more foreign workers
unless there is a well-directed training program. These foreign
experts are here as the owners of the RMG factories do not
believe that there are Bangladesh- is available to do the work.
The nation should be very ambitious here; establishing a
university-level program to train mechanical engineers, chemists,
and material engineers. One way to achieve this is to seek
association with one of the leading western universities with
excellent textile credentials for the garment and textile sectors.
Despite the efforts of these institutions for many years, there has
been no reduction in the use of foreign managers and middle
managers. I think there is no shortage of competent personnel to
be trained, but there is a tremendous shortage of resources.