Infrastructure shortfalls have remained a great concern for the $20bn-apparel industry, the mainstay of the country’s economy. Other factors including undue external pressure, red-tapism, propaganda and shortage of skilled manpower have also worked as setbacks.
The observations came out of a brainstorming roundtable organised by the Dhaka Tribune at the Cirdap Auditorium in the capital yesterday.
To bring dynamism in the industry, apparel leaders yesterday once again raised their demand for setting up a separate dedicated ministry for the ready-made garment sector.
Commerce Minister Tofail Ahmed attended at the event where RMG leaders, makers and exporters, leaders of workers and representatives from ILO, Accord and Alliance were present.
Dhaka Tribune Editor Zafar Sobhan conducted the roundtable.
“Poor infrastructure is the main challenge for export growth. It takes about one day to transport goods from Gazipur or Narayanganj to the Chittagong port,” said Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Atiqul Islam in his keynote presentation.
He said: “We eye on taking Bangladesh’s apparel export to $50bn by 2021, but we have some challenges on our road to achieving the export target.”
He said the country had been having to spend Tk400 crore every year as fees to around 19,000 foreigners working at the mid-management level or higher positions in the sector because of a weak forward linkage industry and shortge of skilled manpower.
The BGMEA president said productivity in the garment factories had not been increasing in line with the rising cost of production. Compared to India’s 92%, Pakistan’s 88% and Vietnam’s 90%, Bangladesh’s productivity was only 77%, he said.
For speeding up and achieving sustainable growth in the sector, Bangladesh needed to address issues such as forward linkage, skilled human resources, bureaucratic hurdles, gas and power shortage, high bank interest rates, Atiqul said.
Reinforcing their longstanding demand for a separate RMG ministry, he said that day was not too far way when there would be no east, no west, but Bangladesh would the best.
In his speech, Commerce Minister Tofail Ahmed said despite being competent in compliance, the sector has failed to achieve the expected growth because of propaganda spread by some workers who do not work in the factories.
“According to Accord and Alliance reports, only 1.8% or 30 out of the 2,021 factories are faulty...But 2% is acceptable as per international law. Despite this, we are not getting positive response from the USA.”
He said: “We do not see any organisation like Accord and Alliance in Cambodia. They have only 30 trade unions. There is no trade union in China at all....But we have them in Bangladesh. Then why are we the second largest exporter in the world?”
Slamming a US envoy who claimed that Bangladesh paid zero tariff for garment exports, the minister said: “We are paying higher tariff than any other countries for apparel exports to the US market. Bangladesh is 46th in terms of exports to the USA, but second in terms of paying tariff, which is unfortunate.”
Despite fulfilling the 16 initial conditions set after GSP suspension, the USA kept on imposing more conditions, which the minister said was unexpected.
In the view of Tipu Munshi, a former BGMEA president and now a parliament member, the first and foremast problem was infrastructure. “Once we have sufficient infrastructural support, we can give rise to miracles,” he said.
He said: “We have faced strong competition in the international market after we increased wage last time as cost of production increased manifold. We have been assured at that time by the buyers that we would look into the matter. But unfortunately, instead of increasing prices, buyers reduced price, making it difficult for the apparel sector here to survive.”
Leading worker rights activist Shirin Akhter, also president of Karmojibi Nari, said it was true that huge employment generated by the apparel industry had brought drastic changes to the society.
“But we have to ensure worker rights and safety, which help boost productivity and to achieve the export target of $50bn by 2021,” she said.
“There is no alternative to effective trade unions for the betterment of the industry,” she suggested.
Former BGMEA president Anwar-ul- Alam Chowdhury emphasised on concerted efforts to address the difficulties that the RMG industry had been facing right now.
“The effects of the Rana Plaza tragedy can still be felt as buyers are offering no fresh orders. This is bad news for the industry. This problem might get worse in the days to come, if immediate measure are not taken,” Anwar said.
He also said: “Accord and Alliance inspections have identified only 2% factories faulty. This message should be broadcast to the outer world to build a positive image of the country.”
Abdus Salam Murshedy, former BGMEA president and managing director of the Envoy Group, said: “Our products have become less competitive after we ensured safety and compliance in line with the labour law and raised workers’ wages. This is now our main challenge.
“The global apparel market has been growing bigger, but our export is falling. That is also a matter of concern. So, it is high time that we make a strategy to save our industry,” he said.
Stressing the need for infrastructural development, Murshedy said: “Only building four-lane highways is not a solution. We need to set up deep sea ports for sustainable growth of the RMG sector as well as the economy.”
Labour leader Sirajul Islam Rony said making sure that the workers affected by industrial disasters and closures got their benefits was also important for cementing rights.
Saying that trade unions were good for boosting productivity, but should not be used against the owners, Rony said the fact that workers were sometimes instigated to take to the streets, also needed attention.
Towfique Ali, chief executive of the Bangladesh International Arbitration Centre, said: “Along with the micro perspective, we have to focus on larger perspective as well. We are facing challenges from Vietnam and Cambodia. We have to make sure that we maintain the minimum standard and at the same time be able to compete from within our limits.”
Rob Wayss, Accord executive director in Bangladesh, said: “There seems to be an important missing constituent [of union workers] from the discussion.
“One of the most important things I think in going forward for the continued growth and dominance of the garment industry in Bangladesh as a global industry is remedying the factories, and being cooperative about that.”
He said: “It is true that 2% of the factories that we inspected are critical and most of the factories have some problems which have to be fixed. It is important for all of us to fixing those and fixing in a timely manner. And that is the best way to show the buyer, show the world that Bangladesh is improving and will dominate the industry.”
In reply to the commerce minister’s query, Rob said USA had 9% trade union in the private sector and 25% in public sector.
Alliance Managing Director Meshbah Rabin said: “The entrepreneurs rely upon others when they are asked to fix something. Fixing my house is my obligation. Nobody else will do that for me.”
He said another Tazreen or Rana Plaza disaster would bring in newer challenges for the industry. “For the relocation, the small and medium factories will face trouble as buyers are not interested to put order in shared buildings.”
He also said: “A number of factories work on sub-contracts. They are not members of the BGMEA or the BKMEA and the government has no control over them. They are non-traceable. So, sub-contracting should be brought under a common umbrella.”
General Secretary of Bangladesh Trade Union Kendra Wajedul Islam Khan, Director of Desh Group Vidiya Amrit Khan and Director of International Labour Organisation (ILO) Baki Srinivasa Reddy also spoke at the roundtable.