Bangladesh And The Garments Sector

Bangladesh and the Garments Sector

Reason behind the crises The garment industry of Bangladesh has been the key export division and a main source of foreign exchange for the last 25 years. The industry provides employment to about 3 million workers of whom 90% are women. This sector is entirely export oriented and is composed of over 5000 units - most working for international buyers, some owned by international companies. Most of the garment units are clustered in industrial areas and Export Processing Zones (EPZs) in and around Dhaka. In 1978 the Bangladesh government set up EPZs to attract foreign capital and earn export dollars. In 1993 the Bangladesh Export Processing Zone Authority (BEPZA) was set up and a blanket ban on trade union activity imposed. The EPZs now employ 70,000 workers, mostly in the garment and shoe-making industries (though most of the garment industry exists outside the EPZs). National labour laws do not apply in the EPZs, leaving BEPZA in full control over work conditions, wages and benefits. Garment factories in Bangladesh provide employment to 40 percent of industrial workers. More than threequarters of the $7.8 billion of Bangladesh's export earnings comes from exporting garments. Most of the garment workers have migrated from the poorest rural areas into the city slums. The slum population of Dhaka has doubled in the last 10 years (up to 3.4 million in 2006 from only 1.5 million in 1996 following heavy rural-urban migration). More than 90 per cent of the slum dwellers have income below poverty line, which is Taka 5,000 (£ 37.00) a month per household. The dwellers are mostly transport workers, day labourers, garment workers, small vendors, informal traders and domestic helps. It is this wider community that usually joins in the clashes and riots with the garment workers. The global economy is controlled by the transfer of production, where firms in developed countries turn their attention to developing countries. The new system is centred on a core-periphery system of production, with a comparatively small centre of permanent employees dealing with finance, research and development, technological institution and modernisation and a periphery containing dependent elements of production procedure. Reducing costs and increasing output are the main causes for this arrangement. They have discovered that the simplest way to cut costs is to move production to a country where labour charge and production costs are lower. According to one report (see Editorial Section, New Age, 30/01/2008) the hourly wage in Bangladesh is $0.25 compared to $0.35 in China, $0.60 in India, $0.40 in Indonesia, , $0.40 in Pakistan, $0.45 in Sri

Lanka and $2.40 in Mexico. The MFA was renewed on three occasions over the years and was finally phased out on 1 January 2005. The MFA expired and Bangladeshi exporters were no longer protected by the quotas restricting imports of textiles and clothing from more competitive countries like China and India. The end of the quota system led to the loss of 1 million jobs in Bangladesh’s clothing industry. The Bangladeshi government itself estimated that at least 200,000 to 300,000 workers lost their jobs. Millions of jobs in related sectors of activity, such as transportation, button making, information businesses, hotels, financial services and property companies went into risk. USA’s imports of baby clothes from China more than quadrupled in 2002, whilst those from Bangladesh fell by 16%. Other types of clothes show similar trends: according to the government, Bangladesh has lost 33% of its export markets for the 29 products removed from the quota system on 1 January 2002, mostly to the benefit of China and Vietnam. Hundreds of garment factories were closed between 2001 and 2003 following the drop in demand from the USA after the attacks on September 11 2001. As the import of Chinese goods increased, the USA also started to buy more clothes from Caribbean and sub-Saharan African countries, which have recently been granted customs-free access to this market for their clothes. At the same time, the USA has kept high taxes on clothes imported from Bangladesh. In 2002, Bangladesh paid almost the same amount in tax on its 2.4 billion dollars of clothes exports to the USA (approximately 330 million dollars) as France for its 24 billion million dollars of exports to the USA. The other major market for Bangladeshi exporters, the European Union (EU), has scrapped import dues though only on a few clothes containing a certain proportion of materials with the “made in Bangladesh” label. Solely concerned with making profits, Bangladeshi garments employers are quick to accept orders even when they know it will be very difficult to deliver them on time. They put pressure on employees to do a lot of overtime. Given the low basic wages, the workers are forced to agree to do this overtime. However the fatigue that the latter produces adds to the existing bad health of many workers in this sector and to a reduction in the quality of products and in the companies’ productivity. That has gone worse since the government has recently announced that it would increase the amount of authorised overtime and reduce the restrictions on women’s night work.

Trade Unions The textile and clothing companies in Bangladesh are some of the most hostile towards recognition of workers’ union rights. Out of 3,000 textile firms that produce for the export market barely 127 have an officially registered union and

less than a dozen employers have serious negotiations with unions. Workers are frequently victims of sackings, beatings or false accusations by the police of militancy within their unions. Workers who try to set up a union are not protected before its registration and so are often subjected to harassment from their employers, which sometimes assume a violent form with police support. The names of workers asking to register a union are often passed on to employers, who quickly try to transfer or sack them, above all in the textile sector. Even once a union has been registered those workers suspected of activism are subjected to frequent harassment. Majority of trade unions in Bangladesh have direct or indirect links with local and foreign Non-Governmental Organisations (NGOs), and receiving lucrative grants seem to be their main goal. Most of the trade unions appear to be tools of main political parties, strikes being used more as vehicles for pursuing political goals against rival parties rather than improving workers' conditions. Minimum wage for the workers is now Taka 950 (£7.00) a month that was fixed around 12 years ago. Nearly all workers in the Bangladesh garment industry work for little more than starvation wages, under conditions closer to those endured by European workers 150-200 years ago. Physical and sexual abuse in the workplace is common where most are girls as young as 12 years old. Over time is often compulsory and wages are sometimes withheld for months. The condition is worse outside the EPZs where 80% of the garments workers are employed.

Exploitation To stay in the international competition without any quota system in place, the garment employers are sucking the blood out of the workers. The minimum wage hasn’t improved for years and with no clear trade union intervention regarding this matter, employers are exploiting workers at will. The easiest way the system can extract surplus value is by prolonging the working hours. This is a classic example of extracting absolute surplus value. In Capital Vol 1, Marx mentions: The prolongation of the working-day beyond the point at which the labourer would have produced just an equivalent for the value of his labour-power, and the appropriation of that surplus-labour by capital, this is production of absolute surplus-value. It forms the general groundwork of the capitalist system…. (Karl Marx, Vol 1, Part 5, chapter 16) There is a limit in increasing the total working hours. It has serious impact on the health of the workers, resulting in inefficiency. A study carried out in 2003 by a Bangladeshi institute on over 800 textile workers discovered that 42% of women workers and 24% of their male counterparts are suffering from

chronic diseases (such as gastro-intestinal infections, urinary complaints, blood pressure problems and anaemia, etc.). 45% of the women and 36% of the men who were interviewed said they felt weak, whilst 3% of the women and 4% of the men had fainted in the months prior to their interviews. Their weakened state is causing major losses of productivity but has not encouraged the bosses to make radical improvements to the situation This is not the end of the plight of the workers. With huge job losses in the garments sector women workers are the most vulnerable. It can be said that trafficking of Bangladeshi girls to foreign countries could increase as the number of jobs falls in the textile industry. The prospect of getting a job in this sector in Dhaka or other major cities attracts tens of thousands of young women from rural areas, who are determined not to return to their villages without having succeeded in earning a lot of money. The traffickers are well aware that these young women are in a very vulnerable position. In most cases these women have no idea of the risk they run of ending up in foreign prostitution networks. The traffickers sell these girls for around 100 to 400 US dollars. India, Pakistan and some Arab countries are the main destinations for these smuggled girls.

Conclusion Karl Marx wrote 120 years ago, “Capital is dead labour, that, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks.” (Capital, Volume I, Chapter 10). Marx’s quote is an exact example of the capital system in the garments sector. In Bangladesh the capital system is worse than vampires. The crises in Bangladesh should also be examined from a global perspective. Globalization yields bad results as seen from the garments sector. In the case of Bangladesh it is clear that impediments to exports worsen the financial stability of poor people. The evidence from the garments sector suggests that relying on trade or foreign investment alone is not enough to improve the condition of poor people of Bangladesh. The poor need education, improved infrastructure, ability to relocate out of contracting sectors into expanding ones. Apologists for capitalist globalization claim that they are bringing jobs and economic development when they chase low wages throughout the developing world. Instead it destroyed many rural based economies and agricultures, driving millions off their land. This is a pattern repeated by all the so-called free trade agreements. Lenin made it clear in his “Imperialism: the Highest Stage of Capitalism,” that imperialism is not a policy. It is a stage of capitalist development, an objective process. The same is true of capitalist globalization. It is not a policy of this or that government. It is an objective process of transnational capitalist development. This distinction is important to understanding the class struggle today. Government

policy can have impact on how capitalist globalization proceeds, as long as capitalism is the dominant economic system, its globalization will continue. The process of capitalist globalization is a very important context for understanding the labour movement in the Bangladesh today. How did we get here? Why such a steep decline in union membership in the last 25 years? These are some of the questions we would like to follow in a later article. Capitalist globalization has to be met with international labour solidarity. The process of building global labour solidarity is an objective process of the class struggle, just as capitalist globalization is an objective process. One clear responsibility for progressive forces in labour is to make the connections and push for greater and greater international ties and contact with workers of the world.

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