Bangladesh: still standing on one leg

Many Westerners learned the true cost of the cheap Bangladesh-made clothing they wear when they saw the ruins of the Rana Plaza factory. But as I discovered, the country cannot do without its main export industry when it has such dysfunctional politics

 

Our coach swung off the crowded, polluted roads surrounding Dhaka, the capital of Bangladesh, and crashed through the potholes filling a narrow lane until a boom halted our progress. Once it was lifted, we entered another world: one in which lush flowerbeds surrounded an ornamental lake, with a fountain in the centre, brightly-coloured tropical birds called from a small zoo, and children played happily in a well-equipped creche.

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The gardens adorning Beximco’s industrial park

The last thing one would expect to find here is a garment factory. If Bangladesh’s main export industry conjures up any images abroad, it is of the ruins of Rana Plaza, the giant sweatshop which collapsed in April 2013, killing more than 1,100 workers. But the gardens, the zoo and the creche are the centrepiece of a 350-acre industrial park run by Beximco, the country’s largest private conglomerate. Most of its 48,000 employees work here, producing not only garments for the likes of Zara and Calvin Klein, but textiles, ceramics – clients include Royal Doulton, Wedgwood and Villeroy & Boch – and pharmaceuticals.

In bringing us to this model facility a few miles from Dhaka, the Bangladeshi government was clearly seeking to counter the bad publicity brought about by Rana Plaza and the political unrest that preceded January’s election. Syed Naved Husain, Beximco’s CEO, spoke proudly of the group’s close co-operation with fashion labels in America and Europe, and of its own expanding retail business, called Yellow. “Bangladesh has roughly a quarter of the world’s apparel exports, about the same as China, and we have a big chance of picking up more as the Chinese move into other areas, notably electronics,” he said.

Many of the 3.6 million Bangladeshis employed by the garment industry work in conditions far less salubrious than those at Beximco, however. Quite apart from the danger of their workplace crumbling or catching fire, Western campaigners have a long list of complaints, from inadequate or non-existent safety training to compulsory overnight work to meet order deadlines, from the use of workers as young as 13 to the pollution of local water supplies by the runoff of fabric dyes from factories. Most of the problems relate to sub-contractors rather than the companies with which Western retailers sign their contracts, but in the wake of Rana Plaza, scrupulous and unscrupulous employers alike faced a new threat.

“Last year my customers told me that they were actively looking for other sources of supply, because of consumer pressure,” said one manufacturer. While the danger of a consumer boycott appears to have faded, much of the promised compensation from Western companies whose garments were being produced at Rana Plaza remains unpaid. Factory inspections have been stepped up, and the Dhaka government enforced a sharp rise in minimum wages, but local sources wrily point out that if people in America and Europe want to help poor people in Bangladesh, the simplest way would be to pay a little more for their clothes. There is little sign of that happening, though.

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Bangladeshi workers make jeans for export

Without a change of heart by Western consumers, the Bangladeshi government has little room for manoeuvre. The garment sector may employ only a fraction of the country’s 160 million people, almost half of whom work in agriculture, but clothing makes up 80 per cent of exports. Last year the sector brought in over $21 billion, or 18 per cent of GDP. And, despite the Rana Plaza disaster and numerous other problems, such as erratic power supplies, garment exports still managed to grow in the first quarter of 2014.

The government is also reporting a boom in Bangladesh’s other major export: people. Around 8.7 million of the country’s citizens work abroad, mainly in Saudi Arabia and the Gulf states. In 2013 over 400,000 Bangladeshis started jobs abroad, swelling remittances that totalled some $15 billion, about 13 per cent of GDP. The official Bureau of Manpower, Employment and Training (BMET) is doing its best to boost the numbers further, with 37 training centres for would-be expatriate workers already in operation around the country, and another 35 under construction. Over 2.2 million workers’ details are held in a central database as the overseas recruitment process is digitised, with the aim of eliminating illegal middlemen.

Yasmin Choudhury, a Briton of Bangladeshi origin, believes workers should have an alternative to crowding into factories or going abroad. She has set up a company, Lovedesh, which is seeking to revive traditional crafts and market them overseas. “Dhaka muslin, the finest ever made, was world-famous, but it is now defunct,” said Ms Choudhury. “I am working with village weavers who are still making Jamdani cotton muslin, which is almost as fine, from memory. They say they don’t want to work in factories. What they need is outlets for their goods.”

But Fung Siu, Asia Editor of the Economist Intelligence Unit (EIU), says exports of factory-made garments and remittances from overseas workers are the answer to a mystery that has long puzzled analysts: how has the country prospered when its politics are so dysfunctional? Bangladesh has grown at an average of 6 per cent a year for the past two decades, a period during which the same two female party leaders have been locked in an unceasing struggle for dominance.

Both Sheikh Hasina and Begum Khaleda Zia inherited their positions through assassinations, the former from her father, Mujibur Rahman, the founder of the nation, the latter from her husband, Ziaur Rahman, the country’s first military leader. Each woman has won two of the last four elections, and sought to eclipse her rival while in office. In 2007 the military imprisoned them both in an attempt to bring their dynastic duel to an end, but was forced to admit on their release that nothing had changed.

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Bangladesh’s modern parliament, home of primitive politics

Sheikh Hasina and her Awami League are currently on top, having won the January 2014 election decisively after weeks of political unrest during which over 100 people died. Begum Khaleda’s Bangladesh Nationalist Party (BNP) and its Islamic ally, Jamaat-e-Islami, boycotted the poll, hoping to rob it of legitimacy. The gamble appears to have failed: Sheikh Hasina has faced down calls for another election any time soon, despite credible reports that the January turnout reached 40 per cent only with some judicious ballot-stuffing. Since street protest is the sole outlet for the main opposition, the danger of further instability is clear.

Just to highlight the surreal state of Bangladeshi politics at present, in the southern town of Cox’s Bazar we met the former military dictator, Hussain Muhammad Ershad. He explained that his Jatiya Party, having come a distant second in the January election, was now the official parliamentary opposition – after a fashion. Still hale and upright despite his 84 years and a spell in prison for corruption after his fall from power in 1990, General Ershad said he had agreed with Sheikh Hasina to act as her personal envoy to Middle Eastern countries. As a result he has handed over leadership of his party in parliament to his wife, Raushan.

The constant turmoil in Bangladesh’s political class has entrenched corruption and led to highly visible shortcomings in such areas of infrastructure as transport and power generation. Yet Ms Siu of the EIU says that it has also allowed the all-important garment sector free rein. “As for remittances,” she added, “they mean that money finds its way to the poor in the countryside, supporting rural incomes in what is still an agrarian society.” The famine that took more than a million lives in 1974 would not occur today. Thanks to the construction of cyclone shelters and early-warning systems, both heavily funded by foreign donors, loss of life from recent cyclones has also fallen sharply from the 150,000 estimated to have died in 1991. The country’s disaster preparedness is considered among the best in south Asia.

Bangladesh is moving away from donor assistance and aspiring to join the ranks of middle-income countries, but many obstacles lie in its way. Too high an increase in its GDP per head could lead the European Union to remove duty-free access for its garment exports, a crucial advantage Bangladesh holds over competitors such as Vietnam and China (though not Pakistan, which enjoys the same concession and is rapidly increasing exports). Rather than training people to work abroad, the country also needs to do far more to increase the quality of its domestic workforce.

Remittances suffered in the wake of the international financial crisis and recession that began in 2008, while Paul Yu, Executive Director of South China Bleaching and Dying, a company which has been producing clothing for export from Bangladesh since 1996, highlighted the risks of over-reliance on one industry. “At independence in 1971, GDP here was the same as South Korea’s,” said Hong Kong-born Mr Yu, who has lived in Bangladesh for over a decade. “The garment stage of a country’s development shouldn’t last over 15 years, then you should graduate to the next stage in investment, such as electronic goods. But that is not happening here. We are still standing on one leg.”

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Gazing out to sea near Cox’s Bazar