Fears for fu­ture in Bangladesh gar­ment sec­tor

The Myanmar Times - - Business -

THE hor­rific slaugh­ter of din­ers at a Dhaka cafe has fanned fears that surg­ing Is­lamist violence may im­peril the gi­ant gar­ment in­dus­try in Bangladesh, which built its econ­omy on cheaply sup­ply­ing fash­ion to the world’s big­name brands.

Gun­men stormed the Ho­ley Ar­ti­san Bak­ery in the cap­i­tal’s diplo­matic quar­ter on the evening of July 1, round­ing up for­eign hostages be­fore mur­der­ing 20 peo­ple with ex­plo­sives and ma­chetes, in a bru­tal tar­get­ing of the small ex­pat com­mu­nity (see re­lated story page 12).

Is­lamic State ji­hadists re­leased grue­some im­ages of corpses ly­ing in crim­son pools on the cafe floor as they claimed re­spon­si­bil­ity for the deadly 11-hour siege. Most of the vic­tims were Ital­ian or Ja­panese.

“This at­tack will turn away for­eign­ers,” said Faruque Has­san, se­nior vice pres­i­dent of the Bangladesh Gar­ment Man­u­fac­tur­ers and Ex­porters As­so­ci­a­tion, which rep­re­sents 4500 fac­to­ries.

“The im­pact of this at­tack will be very dam­ag­ing for the in­dus­try. We are now ex­tremely wor­ried,” added Mr Has­san, whose Gi­ant Group sup­plies clothes to re­tail­ers in­clud­ing Bri­tain’s Marks & Spencer and Next.

Even be­fore the cafe siege, Bangladesh, the world’s se­cond-big­gest ex­porter of ap­parel af­ter China, was reel­ing from a wave of Is­lamist-linked killings of re­li­gious mi­nori­ties, lib­eral ac­tivists and for­eign­ers, in­clud­ing an Ital­ian aid worker last Septem­ber.

Con­cern is mount­ing that the South Asian na­tion, wracked by po­lit­i­cal in­sta­bil­ity since in­de­pen­dence in 1971, is slid­ing into deeper chaos, with un­der-pres­sure po­lice ar­rest­ing 11,000 peo­ple last month in a des­per­ate crack­down.

“The hostage cri­sis in Dhaka is a ter­ri­ble tragedy re­flect­ing how se­cu­rity has de­te­ri­o­rated in the coun­try,” said Sarah Labowitz, co-di­rec­tor at the NYU Stern Cen­ter for Busi­ness and Hu­man Rights in New York.

The violence presents “a se­ri­ous threat to the econ­omy”, Ms Labowitz said. “This kind of at­tack will surely keep [fash­ion] buy­ers away in the months lead­ing up to the hol­i­day shop­ping sea­son.”

Although one-quar­ter of its 160 mil­lion peo­ple still live be­low the poverty line, Bangladesh has clocked growth of around 6 per­cent nearly ev­ery year since the turn of the mil­len­nium.

That’s largely thanks to gar­ment ex­ports, the lifeblood of its econ­omy, ac­count­ing for more than 80pc of to­tal out­bound goods last year.

Be­tween them the na­tion’s cloth­ing fac­to­ries em­ploy more than 4 mil­lion peo­ple, most of them im­pov­er­ished ru­ral women.

Ul­rica Bogh Lind, a spokesper­son for H&M, which sources many of its clothes from Bangladesh, said the Swedish chain was “deeply sad about the tragic in­ci­dent”.

“We are of course mon­i­tor­ing the sit­u­a­tion in Dhaka closely.”

Trade-de­pen­dent Bangladesh may suf­fer the same fate as its restive ri­val Pak­istan, warns Ah­san Mansur, a for­mer rep­re­sen­ta­tive for the In­ter­na­tional Mon­e­tary Fund in Is­lam­abad.

“I saw the de­cline of a promis­ing econ­omy into a ter­ror­ist hotspot. This at­tack re­minds me of those days, although I hope things won’t turn out that way,” said Mr Mansur.

When ex­trem­ist violence be­gan to spread in Pak­istan, he said, the first sign of fi­nan­cial malaise was ex­pat fam­i­lies pack­ing their bags, then trade and in­vest­ment crum­bled.

“The per­cep­tion that Bangladesh is a po­ten­tial ter­ror­ist hotspot can se­ri­ously hit our ex­port po­ten­tial and growth prospects.”

Yet plucky Bangladesh has rid­den out nu­mer­ous storms, see­ing off threats from labour un­rest, mass trans­port block­ades and large-scale po­lit­i­cal paral­y­sis – as well as work­place disas­ters. Cloth­ing ex­ports swelled nearly 10pc in the year to June, to US$27.3 bil­lion, in­dus­try fig­ures show.

The deadly Rana Plaza fac­tory col­lapse that killed at least 1138 work­ers in 2013 shocked the world, heap­ing op­pro­brium on West­ern re­tail­ers seen as ex­ploit­ing im­pov­er­ished work­ers.

But the tragedy prompted re­tail­ers to act on ap­palling safety con­di­tions in their fac­to­ries, where fires and other ac­ci­dents are fre­quent.

Brands set up two global al­liances to make work­shops safer and cleaner – although it re­mains a work in progress.

While re­tail­ers will watch Bangladesh closely, in­dus­try ex­perts point out that un­rest plagues many de­vel­op­ing coun­tries where labour is cheap.

As Is­lamist at­tacks in France, Brus­sels and the United States over the past year show, the threat of ex­trem­ist violence is not con­fined to sin­gle coun­tries.

“If for­eign­ers give in to fear, ter­ror­ism’s po­lit­i­cal mis­sion will have suc­ceeded,” said De­vang­shu Dutta, chief ex­ec­u­tive of Third Eye­sight, a re­tail con­sul­tancy in New Delhi.

“Ex­ports and for­eign in­vest­ment are both crit­i­cal [in] the up­lift­ing of a very large poverty-stricken pop­u­la­tion,” he said. “The con­tri­bu­tion of for­eign­ers is vi­tal. It is im­por­tant for ev­ery­one to re­main en­gaged.” –

Photo: AFP

Bangladeshi ac­tivists and rel­a­tives of vic­tims of the Rana Plaza build­ing col­lapse march on the third an­niver­sary of the dis­as­ter in Dhaka in April.

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