Bangladesh garment industry trembles after Dhaka attack
DHAKA/MUMBAI (Reuters) – Some leaders of Bangladesh’s $26 billion garment industry expect Western fashion retailers to review their ties with the world’s second-largest garment exporter after Muslim terrorists killed more than a dozen foreigners in an attack on a Dhaka restaurant on Friday.
Bangladesh, one of the world’s poorest countries, relies on garments for about 80 percent of its exports and for some four million jobs. It ranks behind only China as a supplier of clothes to developed markets such as Europe and the United States.
“An incident like this will definitely impact us in as much as our importers from places such as [the] US and China will be wary to visit because of the security concerns,” Ananta Garments managing director Shahidul Haque Mukul said.
The industry had been recovering strongly from a major tragedy three years ago, when a factory building collapsed, killing more than 1,100 people. That prompted safety checks that led to many factory closures and the loss of exports and jobs.
It had also seemed little touched by a spate of recent murders on liberals, gays, foreigners and religious minorities in sporadic attacks claimed by Islamic State and al-Qaida.
Between October and January, its exports surged 14% from a year earlier.
But Friday’s attack signaled a more chilling threat to foreigners. The terrorists targeted a building housing two upmarket eateries popular with foreigners, and several of those killed were Italian garment entrepreneurs.
“Bangladesh has never seen such a horrific incident,” said Mohammad Siddiqur Rahman, the president of the Bangladesh Garment Manufacturers and Exporters Association. “It is a strong slap to our image. It will put pressure on our business. But we cannot say to what extent at the moment.”
A Bangladesh-based executive for a French-based garment buyer said he feared a deep slump in business in the coming days.
But other industry figures said heightened security fears could be managed and that manufacturers could hold more meetings with Western customers outside Bangladesh, in Asian cities such as Singapore or Hong Kong, a trend that had begun some time ago.
“Concerns on visiting our factories, holding meetings, etc., by foreign nationals will be there for a few months,” said Abdullah Hil Rakib, the head of exporter Brothers Fashion Ltd. “But I believe within six months the intensity will thaw, and things will be back to normal.”
The industry owes its resilience to some of the world’s lowest wages, the right skills and that China has become less competitive as a producer in recent years.
The minimum monthly wage for garment workers in Bangladesh is $68, compared with about $280 in mainland China.