In the rising time of globalization and neoliberalism in the 1970s, President Ziaur Rahman assumed power in 1977 and played a significant role in steering Bangladesh's economy away from the socialist policies of Sheikh Mujibur Rahman, which favoured state control and extensive nationalization. Zia's administration implemented significant reforms, including privatizing state-owned enterprises, believing it would boost productivity and economic growth while promoting a more substantial role for the private sector in manufacturing, textiles, and trade.
Later, Zia visited South Korea, where several companies showed interest in joint ventures with Bangladesh, a crucial role in establishing joint ventures in Bangladesh's emerging ready-made garment (RMG) sector. Notable partners included Daewoo Corporation, Youngone Corporation, and Samsung C&T. In 1979, Daewoo collaborated with Desh Garments to train Bangladeshi workers. This partnership set a significant precedent for the industry. Starting its first facility in the early 1980s, Youngone expanded its operations significantly and became one of the largest foreign investors in the RMG sector. Although not directly involved in manufacturing, Samsung C&T sourced garments and provided quality control and logistics expertise, enhancing product quality for Bangladeshi manufacturers.
The early 1990s was also favourable for a garment-producing nation like Bangladesh. The North American Free Trade Agreement (NAFTA), signed in 1994 by the United States, Canada, and Mexico, sought to manage China’s exports to North American markets. In response, many Chinese companies moved their operations to Bangladesh during this time, aiming to boost production and send goods to these markets. Although NAFTA had yet to provide Bangladesh with direct quota-free access, it still influenced the country's opportunities in the North American market in several notable ways.
A key factor was Bangladesh's competitive advantage in the RMG sector. While NAFTA made Mexico a leading apparel supplier to the US market, Bangladesh benefited from its lower labour costs. Bangladesh could deliver high-volume, low-cost garments to North America with no quota restrictions, especially in areas where Mexico struggled to compete effectively.
Reflecting on the earlier phases of the RMG business in Bangladesh, a group of young, self-motivated entrepreneurs launched their ventures and marked the beginning of what would become the world's second largest RMG-manufacturing country.
The textile industry in Bangladesh boasts a rich and evolving history. Once celebrated as a global trade hub for its exceptional silk, ancient Bengal encountered significant challenges during British colonial rule, which shifted focus to industries in England and Scotland. This diversion delayed the revival of cotton production until after the colonial era. The independence of Bangladesh and investments from Western and European countries have significantly contributed to the growth of the RMG sector.
Modern Bangladesh transformed its jute production into RMG goods, primarily influenced by the World Bank and the International Monetary Fund (IMF) initiatives in the early 1980s, marking a proactive approach towards restructuring the global trade system under neoliberal principles.
Bangladesh has effectively implemented a low-price strategy since the 1980s, allowing it to gain a significant foothold in global trade while building partnerships with renowned international clothing and fashion brands. As a newly independent nation in the early days, Bangladesh faced challenges in building industry expertise and establishing robust regulatory frameworks aligned with International Labour Organisation (ILO) conventions.
Factories were established in key urban areas such as Dhaka, Gazipur, Savar, Narayanganj, Fatullah, Chittagong, and Khulna. While rapid industrialisation posed environmental challenges, it highlighted the workforce's potential -- comprising nearly 80% of young women from local districts and villages with limited or no education. This situation transformed what was once seen by this group of people as a burden into a vital resource that significantly contributes to Bangladesh's foreign currency earnings.
Empowering workers will foster a healthier and more productive work environment
While Bangladesh and many Western countries have benefited economically, the RMG sector faces significant challenges. Global retailers like H&M and Walmart have grown at the expense of hardworking RMG workers, who have endured immense pressure and exploitation over the past 45 years. This situation underscores a troubling reality where profit often overshadows ethical considerations despite being framed as a trade balance between developed and developing nations.
International labour organizations, human rights groups, and advocacy organizations have drawn significant attention to the challenges workers face in Bangladesh. These groups have actively engaged with the US government, urging it to support efforts to improve labour rights in the country. The US government suspended the Generalized System of Preferences (GSP) to encourage Bangladesh to address these critical issues.
In June 2013, the USA suspended Bangladesh's GSP trade benefits due to concerns over labour rights and workplace safety in the garment sector. The suspension was primarily triggered by the collapse of the Rana Plaza, which killed over 1,100 workers. This tragedy exposed unsafe working conditions, following earlier incidents like the Tazreen Fashions factory fire that claimed over 100 lives.
The suspension had a metaphorical and reputational impact, raising concerns about working conditions in the country among international brands and retailers that source garments from Bangladesh. This increased pressure on the government and factory owners to enhance safety and labour standards to maintain business relationships with major global buyers.
After the GSP suspension, Bangladesh took several steps to address the concerns raised by the US. For example, after the Rana Plaza incident in 2013, the Bangladesh government amended its labour laws to improve workers’ rights, including unionisation and worker safety provisions. Most importantly, it was an excellent initiative for the first time doing business by the global apparel brands in Bangladesh took the initiative to rectify the factories that were vulnerable and caused substantial safety issues for RMG workers in Bangladesh.
The concerted efforts of the Bangladeshi government along with bodies such as BGMEA, Accord, and Alliance have effectively brought factory fires and building collapses under control. This achievement is commendable, yet a strong focus is still needed to enhance labour rights in the country. One critical area to address is workers' right to organize and form unions without fear of intimidation, violence, or job loss. Empowering workers will foster a healthier and more productive work environment.
To foster a more positive environment for Bangladesh's RMG workers, it is essential to enhance the enforcement of labour laws and ILO conventions that govern industry regulations. By addressing critical issues such as wages, working hours, worker protections, and trade union registration, the government can create significantly improved conditions for all RMG workers. Furthermore, incorporating industry relations experts into policy-making and executive roles will help to ensure a comprehensive understanding of labour issues from various perspectives, leading to more effective and thoughtful regulation of the industry.
Dr ASM Anam Ullah (PhD) is an Australian academic, human rights activist, political analyst, and OHS and industrial relations expert.
