Poll-bound Bangladesh is heading towards another election and all eyes are on it. While the country is busy with poll-related political developments, another concern is gradually looming in the plain sight. Recently, eight American Democrat senators have sent a letter to the American Apparel and Footwear Association demanding pressure on the Bangladeshi government and the country’s RMG owners for better wage scale.
Prior to that, in November, US President Joe Biden introduced a new memorandum on a Labour Rights Policy dubbed "Advancing Worker Empowerment, Rights, and High Labour Standards Globally." Under this new memorandum, the US will provide support to labour rights activists and unions for upholding rights and standards worldwide. For that, it would impose sanctions, trade penalties, import ban, visa ban on individuals and entities involved in undermining labour rights and union activists. Foreign Secretary Anthony Blinken, while introducing the memorandum, mentioned Kalpona Akhter: “We want to be there for people like Kalpona Atker, a Bangladeshi garment worker and activist, who says that she is alive today because the US embassy advocated on her behalf.”
The memorandum coincided with Bangladeshi RMG workers' protest that took place in October. The protest took a violent turn and the clashes ended up killing four workers. Ultimately, the government announced a new wage structure with a minimum salary of Tk12,500, a 56.25% increase.
Immediately after Blinken’s mentioning of Kalpona Akhter, an uncertainty has grasped the RMG sector, especially for owners and the association. They have expressed deep concern over possible US coercive measures and its adverse impacts on the sector. Subsequently, a US company had also included a general term in LoC that it would not accept the product if a sanction is placed in any stage of the overall process of the deal. Bangladesh’s Ambassador to the US Muhammad Imran has also discussed Bangladesh’s labour conditions with the US Secretary of labour to clear up confusion. And the latest development regarding labour rights in Bangladesh is the letter to AAFA. In this context, it is worth assessing the reality of Bangladesh’s RMG sector, its societal impact and locating it as per the US memorandum
RMG worldwide and Bangladesh
Worldwide, RMG is a labour-intensive sector. This sunset industry depends highly on cheap labour and, as a result, is sustained by mostly unskilled workers in Least Developing and Developing countries in the East. Similarly, in Bangladesh, RMG also sustains on cheape human labour. Currently, there are 4.4 million RMG workers in Bangladesh with the majority being women.
In labour intensive industries, productivity is an important aspect. It also varies nation wise. Productivity in RMG in LDCs remains relatively low owing to lack of proper training, proper work environment, food, and low wages. Bangladesh’s per hour productivity is only $3.4 less than Myanmar, Philippines, Vietnam, India, and other competitors. Again, in efficiency, Bangladesh’s performance is below average, 40% – 45% compared to the global benchmark of 75-85%.
Even though Bangladesh faces challenges in productivity and efficiency, RMG has a huge societal impact for the country. A study by the Asian Centre for Development in 2015, focused on the societal impact of the RMG sector in Bangladesh. As per the data and survey conducted in 2014, average income of a female RMG worker was Tk18,000 due to increment and overtime income. And 41% of RMG workers were unmarried and only 25% were the head earners of the family. The average age of female workers was 24.1 years in 2015. The data indicates that working in the RMG industry provides the young workforce with an opportunity to generate income on their own.
RMG also has a strong contribution to the country’s women empowerment as it helped rural, illiterate, and unskilled women to come and join a mainstream workforce. Unlike many countries where labour unions are prohibited, Bangladesh has allowed unions to grow constitutionally. Another success for Bangladesh in RMG has been the phasing out of child labour, which was prevailing during the 1990s and even the 2000s. At that time, the US also expressed concern as Child labour Deterrence Act, also known as Harkin bill, meant the threat of an export ban of RMG for Bangladesh. The sound cooperation from both countries as well as INGOs ultimately helped Bangladesh to phase out child labours gradually.
Bangladesh labour rights and reforms
Improving rights is a continuous process and there are vast areas for Bangladesh’s labour condition to improve. However, Bangladesh has already improved a lot and has an upward trajectory in improvement.
After the Rana Plaza incident, Bangladesh’s RMG companies, along with donors and buyers, have improved safety standards and work environments. The recent EU delegation team also lauded the positive changes in the RMG sector. Additionally, Bangladesh has already in the process of implementing the National Action Plan (NAP) on labour reform for the past two years coordinating with the EU. The gradual reform is scheduled to be completed in 2026- the year Bangladesh is likely to graduate from LDC to DC. There are also discussions on labour law reform, which is likely to be passed in the next parliament after the election.
The impact of RMG
Even though RMG -- a sunset industry for developed countries -- is labour intensive and with very strict payment schemes, it has a significant impact for the economy and society in Bangladesh. For the economy, it is the largest export sector with largest markets in the US and the EU. It is also the last resort for many unemployed, vulnerable ,and desperate youth, especially women coming from the poor quarters of society and rural areas. The frequent job openings and expansion of factories also generate employment for a country troubled with unemployment issues. RMG is also an integral part in Bangladesh’s poverty reduction strategy.
From a societal aspect, it is one of the major drivers of women empowerment. Working in this sector has provided vulnerable women from remote and rural areas with economic freedom, valuable skills, and capacity for collective action. As the industry is largely sustained by female labour, it also helped Bangladesh to break away from conservative values once persistent and spread liberal ideas across rural societies.
The impact of any coercive measure, including disruption, ban, trade penalty, or sanction would, therefore, ultimately trickle down on the workers and their families who are dependent upon it. Hence, the issue is highly complex and reality is very delicate for any harsh policies as it may become a hindrance towards liberal values.
A need for welfare and cooperation
RMG stakeholders need to work together to enhance the labour conditions in Bangladesh, that much is obvious. To meet the standards and values of the West, increasing welfare and cooperation is the key.
The US has provided many suggestions during its negotiation and through TICFA. Bangladesh should accommodate these observations for lifting standards. In return, like the phasing out of child labour in the past, the Western stakeholders should provide time and support. For example, Bangladesh is also providing updates regarding the Shahidul killing -- a US concern.
Bangladesh should also focus on increasing welfare for the workers. The health insurance scheme with contributions from workers, employers, and donors is a praiseworthy initiative as medical costs remain a challenge for the workers with limited income. The scheme is also being made possible with the help of all stakeholders. Currently, as a pilot project, a worker will receive expenses up to Tk15,000 against an annual premium of only Tk575. Of the amount, Tk275 comes from donors, and Tk150 paid by workers and owners equally.
Moreover, the extensions of subsidized sales of essential commodity goods to industrial areas are also worthy of mention. The Universal Pension Scheme would also benefit the workers, in this case.
Besides increasing welfare, our law enforcement agencies should also practice restraint to avoid unnecessary violence and blame-games during any labour protest. In turn, it is the responsibility of the rights activists and union leaders to maintain law and order and prevent vested quarters from profiting off of violence.
Bangladesh’s labour condition is relatively better especially in the RMG sector than many of its Asia-Pacific competitors who do not even have the right to union. Globally, the labour conditions in sunset industries are poor as these are labour-intensive and are run under protectionist policies. But these industries have long term socio-economic impacts. Often these industries are major drivers of liberal values, like Bangladesh’s RMG sector.
Unless there are geo-political considerations, Bangladesh’s RMG sector should not fall under unilateral coercive policy measures as even the long-term consequences of such measures for workers is evident in a statement by labour rights activist Kalpona Akter as, in an interview with Al Jazeera, she expressed: “We obviously don’t want any sanction on this industry. It will be devastating not only for our workers but also for our economy.”
Khalid Saifullah is a freelance journalist. He holds BSS and MSS in Anthropology from Dhaka University.