Bangladesh cannot afford a crisis in the ready-made garment sector

On September 17, 2024, a ready-made garment worker died during a clash between workers in Ashulia, Dhaka. The clash took place between workers at two factories, debating whether to return to work or continue their protests.

Prior to this September 2024 incident, more than a hundred factories had closed due to multifaceted issues, including worker protests, clashes and fears of vandalism. Many factories had already witnessed arson and vandalism.

Since the late 1970s, Bangladesh has become a key player in the textile and clothing sector, consolidating its position as the world’s second largest clothing exporter. The ready-made garment sector is considered the lifeblood of Bangladesh’s economy, contributing $47 billion annually, or 82% of the country’s total export earnings, and employing 4.4 million workers, 80% of whom are women.

Beyond its economic contributions, the ready-to-wear sector plays a crucial role in social development by providing employment to millions of women, promoting gender equality and helping to reduce poverty by providing stable employment for low-income people. Given its profound economic and social impact, especially as Bangladesh rebuilds after the August 5 Revolution, the current crisis in the ready-made garment sector is something the country cannot afford. to extend.

How we got here

The crisis in the clothing industry began to loom after a gas shortage, caused by damage to an LNG terminal in May 2024, forced factories to operate at less than 30% capacity, or even close their doors completely. The situation worsened in July, when students began demonstrating for public service reform, and by the end of the month the protests escalated into revolution.

Since the overthrow of the former government, the ready-to-wear sector continues to face unprecedented challenges, brought about by political unrest, economic difficulties and deep-rooted union demands. Two-month protests, curfews, internet shutdowns and the ongoing energy crisis have led to significant economic losses in the ready-to-wear sector, particularly in July, August and September, which These are peak times for Christmas shipping and orders for the upcoming summer and spring seasons.

On August 29, the crisis intensified when factories in industrial zones began to close due to worker protests and vandalism. The government had to deploy the Bangladeshi army to maintain law and order in industrial areas. Although the intervention of the army allowed the resumption of operations in certain factories, the situation is not yet completely resolved.

The reasons for the troubles

Several key factors are behind this unprecedented crisis. Workers are demanding fair treatment, including equal opportunities for men and women, higher wages, better benefits and lighter workloads. They are also working to resolve issues such as delays in wage payments, the so-called blacklist of laid-off workers, and disputes over unionization, all of which have fueled frustration and anger.

On the other hand, many factory owners say outside forces are fueling the protests, particularly over the scrap and scrap trade, known as “Jhoot Business.” Some even suggest there are plots to weaken Bangladesh’s main export industry.

A case of old wine in a new bottle?

Union protests and unrest in Bangladesh’s ready-made garment sector are not new. Over time, protests have taken place over issues such as labor rights, wage demands, external pressures and economic disarray. However, the current situation is more complex, with a combination of factors fueling the unrest.

The crucial question remains: can Bangladesh afford to let this situation continue? Simply put, the answer is no. Bangladesh cannot afford to prolong this crisis, given the serious consequences it would have on the country if it persists for too long.

Since August 5, many have referred to the current state of the nation as “Bangladesh 2.0.” In this new reality, the country has the opportunity to look back on its past and chart a path to a better future. However, this new reality has also brought new challenges.

First, the country’s economic activities are still recovering from the political unrest and resulting instability. The ready-made garment sector is also vital to Bangladesh’s export market and overall economy, accounting for around 82% of total exports. Any disruption in this sector could trigger a domino effect, negatively impacting the entire economy.

Additionally, this is a crucial season for the ready-to-wear sector as factories are expected to fulfill winter clothing orders from overseas buyers. If these orders are delayed, buyers may be forced to cancel them and seek alternative producers in other countries. Furthermore, if the allegations of external conspiracies prove true, it poses a serious threat to the economic, social and political stability of Bangladesh.

The way forward

To resolve this crisis, a multilateral negotiation process is crucial. Factory owners, workers and union leaders must recognize the seriousness of the situation and refrain from violent action. Factory owners should quickly respond to workers’ legitimate demands, including timely payment of wages, equal opportunities and improved social benefits. It is also essential to reform the practice of blacklisting workers, as it can unfairly end careers and is often misused.

Given the government’s commitment to democracy and human rights, this issue deserves special attention. Additionally, owners should involve workers more in the production process, encouraging a sense of ownership and responsibility.

In return, workers must remain dedicated to their jobs and avoid destructive behavior. They must understand broader economic challenges and prioritize dialogue as the primary method of resolving disputes.

The government must play a key role in facilitating dialogue among all stakeholders, including security officials, civil society, factory owners, union leaders, activists and workers. As the police are not yet fully operational, the presence of industrial police in key areas should be increased. Additionally, the government should investigate allegations related to the scrap metal trade and external influences, as these could pose serious risks if proven true.

Ultimately, it is important not only to resolve the current crisis, but also to use this opportunity to strengthen coordination between all parties involved, thereby helping to prevent future crises in the ready-to-wear sector.

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Imran Hossainlecturer, Rabindra Maitree University, Kushtia.

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Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views and opinions of The Business Standard.