To what extent has the ready-made garments industry been successful in promoting development in Bangladesh? [Essay]

Fazle Rabbi’s father said, “Whenever I go in front of Rana Plaza, I feel like my son will come back suddenly. It feels that my Rabbi will return to me and I can find my son again. But I know he is no more. I see so many other children his age, and my heart aches for him. My elder son told us to change our house but I denied him. I told him this house is attached with my son’s memories and I will not leave this place at any cost.”

Bangladesh has experienced rapid urban transformation, with Dhaka having emerged as one of the fastest growing mega-cities in the world, and other cities and towns in Bangladesh growing at a similar pace (Hossain, 2016). Urbanisation is now considered an “engine of growth and development” for developing countries, with studies demonstrating the influential relationship between urbanisation and subsequent development, including “socio-cultural and political development of the country”. Such development via urbanisation occurs with industrialisation at the core (Ahmed & Ahmed, n.d.). One major industrial activity that has come out of urbanisation and industrialisation in Bangladesh is the ready-made garments (RMG) industry, which has continued to expand. Indeed, recent studies show that the RMG industry currently consists of roughly 4500 garment industries in the country, contributing 76.3% of Bangladesh’s exports in goods and services, and representing 13.6% of its Gross Domestic Product (GDP; Anner, 2018).

Despite these impressive statistics, there is contention as to whether the RMG industry has been a significant development in Bangladesh, and whether it has continued to promote development in the country. While the industry has produced some benefits in some aspects, it has proven to be rather problematic in others, and could even be considered to stall further development. Therefore, in this essay, I will evaluate the extent to which the RMG industry has been a successful means of urban development in Bangladesh, in terms of its impact it has had on the country. To do so, I will evaluate two common claims regarding the importance of the RMG industry in Bangladesh: a) its contribution to ‘emancipating’ women b) its contribution to poverty alleviation. I argue that the RMG industry cannot be considered as having promoted successful development in Bangladesh, and that instead, it is simply a vessel through which the Global North can exploit Bangladesh’s resources, while limiting its ability to truly develop and improve the conditions of its people.

 

Women’s Empowerment

When one looks at the garment industry in Bangladesh, the predominance of women in the workforce in apparent, as they make up 80% of the industry. When trade was liberalised in Bangladesh, allowing foreign investment into the country and expanding the garment industry, this led to a subsequent expansion in employment opportunities, which were taken up by significant numbers of young women (Kabeer & Mahmud, 2004). Indeed, the proportion of urban female labour rose from 12% in 1983-84 to 20.5% in 1995-96 (Kabeer & Mahmud, 2004). Given the context, this was significant, as Bangladeshi society was severely cemented in traditional patriarchy. This meant it was common practice for women to be subjected to restrictions and rules which emphasised their seclusion and obedience to male authority in the household, as well as their position as economic dependents (Kabeer & Mahmud, 2004). Moreover, due to restrictions on mobility, the types of work available and acceptable for women were limited to certain forms of casual and badly paid work, or unpaid reproductive labour. Therefore, the presence of women travelling to work in formal paid employment is considered a sign of emancipation (Siddiqi, 2009). This was particularly celebrated by the Bangladeshi state, with the then President Abdur Rahman Biswas explaining that the RMG industry had “made the womenfolk self-reliant by creating large-scale employment opportunities for them” (BGMEA, 1993).

 

Furthermore, when interviewed, many women working in the RMG-industry spoke positively in regards to their employment. For example, Kabeer and Mahmud (2004) found that the RMG industry had helped women develop further in their careers, as many had proceeded to set up their own businesses after they had left or continued to utilise the skills they had acquired in the factories. The women also began to feel like less of a burden to their families, explaining that employment had enabled them to become more self-reliant and independent (Kabeer & Mahmud, 2004). Kibria (1995) similarly found that women valued their existence in the RMG industry, speaking on how it had helped increase their sense of self-esteem. Furthermore, the RMG-industry also enabled workers to save for marriage expenses, sparing their family of the heavy costs, as well as invest in their children’s’ future, while allowing more financially stable women to purchase luxuries, such as televisions.

 

However, when one delves into the reality of working conditions for women, the extent to which women can be considered ‘emancipated’ is debatable. The reality is, these women are employed due to the ease at which they can be exploited to maximise profits for brands. This is due to the perceived image of women as compliant, and thus more likely to accept poorer working conditions, allowing brands to extract maximum labour at a minimal cost (Kabeer & Mahmud, 2004). This is further highlighted by the way females are treated as dispensable labour, with factories having a turnover rate of less than five years, replacing female workers with the ongoing supply of young, female labour available from rural areas.

 

The exploitation of women in Bangladesh takes place within “a distinct moral regime” utilised in the factory to ensure compliance. This regime identifies women as mere sexualised bodies, with extensive sexual harassment utilised to maintain obedience in the workplace. Those women who comply and remain obedient i.e. stay quiet and do not speak out against their working conditions, are safe from abuse from managerial staff, whereas those who are vocal are vulnerable to sexual advances from management (Siddiqi, 1996). The extent of the West’s prominent role in the perpetuation of such exploitative conditions is highlighted in comparisons of sexual harassment between garment and electronic industries of varying sizes. Researchers found that small garment factories had the highest rates of sexual harassment, coercion and intimidation. This “sexualised disciplinary regime” is suggested to be related to pressure these factories face when given extremely demanding quotas from brands, required to be met in constantly shortening time frames by workers (Siddiqi, 2009). This is in comparison to electronic factories, where deadlines for production are more stable, and require less pressure on workers, so sexual harassment is much more unlikely (Siddiqi, 2009). In fact, lead times in the RMG industry continue to decline, having fallen by 8.14% between 2011 and 2015, subsequently increasing forced overtime and heightened pressure at work (Anner, 2018).  With a decline in protections for workers, as a result of neoliberal policies that have declined the role of the state in labour, female exploitation is unlikely to be addressed. Indeed, between 2012 and 2015, violations to workers’ rights to collective action increased by 11.96% (Anner, 2018). This exploitation and subjugation of the female workforce, perpetuated by the drive for competitive advantage and profit is highlighted by Siddiqi (2009) who argues, “It is through the gendered bodies of industrial workers that the script of global capitalism has been read most visibly and forcefully.”

 

What is particularly striking, is the way in which women are perceived by the state. While their presence in the workforce may imply the state is changing its perceptions of women as more than just obedient dependents, instead, their contribution to the workforce is merely treated as a way to ensure strategic importance in the market (Siddiqi, 2009), denying any dignified representation of their labour. This is to encourage trade with international buyers, by demonstrating that Bangladeshi women are now going out and working, representing a ‘modern’ Islamic country, where Bangladeshi women are now “carrying handbags and walking to work every day (Bradsher, 2004). This was thought to encourage US investment in the garment industry, at a time when the War on Terror tended to steer international buyers away from trade with Islamic countries.

 

Therefore, while women may indeed benefit from employment in the RMG industry, in terms of self-reliance and supporting themselves financially, we cannot neglect the fact that Western corporations and the Bangladeshi state are utilising a facade of female empowerment as a means of extracting low-cost labour via gendered violence for profit and investment. There is no emancipation in oppression. This therefore indicates the failure of the RMG-industry to promote urban development, in terms of protecting its female population and addressing problematic societal structures of patriarchy.

 

Economic independence and poverty alleviation

Bangladesh is one of 189 countries that signed up to the Millennium Development goals, which aimed to halve world poverty by 2015 (Kabeer & Mahmud, 2004). It also committed to halving national poverty, through its National Strategy for Economic Growth and Poverty Reduction (Government of Bangladesh, 2003). One method suggested to alleviate poverty was through trade, due to the failures developing countries had experienced in promoting development via foreign aid. It was therefore believed that by trading internationally (Razzaue, Eusuf & Shammanay, 2007), and increasing employment opportunities (Kabeer & Mahmud, 2004), the RMG-industry could help reduce poverty.

 

Poverty in Bangladesh appears to have declined over the years, with the proportion of individuals living below the national poverty line nearly halving between 1990 and 2010 (Daily Star, 2015). This is suggested to be partly the result of garment exports, which is significantly represented in GDP, rising from 7.5% in 1993-94, to 20.7% in 2012-13 (Daily Star, 2015). Moreover, according to Razzaue, Eusuf and Shamannay (2007), the growth of the RMG industry has resulted in significant effects at the macroeconomic level. For example, it has helped them steady their trade deficit (when a country’s imports exceeds their exports), which declined from around 10% of GDP to 5.5%. They also found that the RMG industry resulted in a reduction in Bangladesh’s reliance on foreign aid, which made up 3% of GDP in comparison to 19% of GDP from the RMG industry previously. Employment has also risen as a result of garments, which is also suggested to help alleviate poverty. For example, the number of individuals employed in the industry rose from 0.1 million people in 1985, to 1.9 million in 2005, making up 35% of employment in manufacturing in Bangladesh (Rahman, 2004). Employment via the RMG industry can take place directly and indirectly, further increasing employment opportunities. For example, Dowla (1997) found that within Export Processing Zones, employment expanded to those who provided raw materials, packaging materials, shipping services etc.

 

However, these statistics mask the reality of the RMG industry and its use as a vessel for the West to continually exploit Bangladesh, by creating a relationship of dependency. This ensures the economic success of Western corporations and states, at the expense of Bangladeshi development.

 

During the neoliberal reforms of the 1970s, Bangladesh followed structural adjustment programmes from the World Bank (WB) and International Monetary Fund (IMF). These programmes worked to reduce protections for the labour workforce provided by the state, and emphasised export-oriented industrialisation led by multinational corporations (MNCs), entering Bangladesh into the competitive global market (Smith, 2014). This has increased the power of foreign capital, allowing the perpetuation of capitalist development, which places MNCs in control (Ibid).  Indeed, Smith argues that in no other sector is production shifted so greatly to oppressed countries, while imperial states remain in control, receiving substantial profits in the process.

 

Due to these neoliberal reforms and capitalist development, as opposed to prior discourse praising the reform of development from aid to trade, Sobhan (2003) argues that the transition was actually a switch from aid-dependence to trade-dependence, emphasising the importance placed on trade as another means of ensuring dependence on the West. In doing so, this ensures a constant, low-cost surplus of labour available to MNCs (Smith, 2014). Dependency on the volatile international market leaves workers and the Bangladeshi economy in a vulnerable position, and has had dire consequences for workers in the past. For example, in 2001, as a result of the economic recession, as well as US foreign policy in the form of the US Trade Development Act in 2000, which shifted garment orders away from Bangladesh, roughly half of Bangladesh’s 3000 garment factories received no international orders and were forced to close down. This was further perpetuated by the 11 September terrorist attacks, deterring international buyers from sourcing from a Muslim country. By December 2001, nearly 1300 factories had shut down, leaving 400,000 unemployed. With limited state support, as a result of neoliberal reforms, former workers and their families had little support to sustain themselves, (Siddiqi, 2009), which would inevitably drive masses into deep poverty.

 

Moreover, with significant control over the RMG industry, this allows MNCs to push wages down with impunity, enabling them to compete in the global market at the expense of workers’ livelihoods. Consequently, Bangladesh has been rated as having the lowest wages in the world (Smith, 2014). This largely stems from the dissolution of the Multi-Fiber Arrangement which led to national panic, as the removal of quotas which ensured regular trade meant there was no longer a guarantee that brands would continue to source from Bangladesh (Bradsher, 2004). Knowing the disastrous impact this could have, particularly given the dependence of Bangladesh’s economy on exports, this led to forced reductions in the cost of production, encouraging brands to continue business with the country. Low wages are the main attraction for western brands, with chief purchasing officers of US retailers naming ‘price attractiveness’ as the main reason for purchasing from Bangladesh. By ensuring low wages, this results in big mark-ups which in turn ensure greater profits for brands. For example, the total mark-up on the production of a T-shirt is 157% (Smith, 2014). This is done through global labour arbitrage, a process where brands profit from imperfections in the market, which have led to differing costs of production between the Global North and Global South for the same product. Indeed, due to the lower cost of labour in Bangladesh, brands have replaced high-wage workers in the North with low-wage workers in the South. With labour making up the bulk of production costs, this allows a greater extraction of profit from the production stage. For example, despite increased campaigns demanding fair wages and better working conditions for Bangladeshi garment workers, a recent study found that prices paid by MNCs to supplier factories have declined by 13%, compelling suppliers to tighten their expenditure, including what they spend on labour (Anner, 2018). As a result, wages have fallen by 6.47% since December 2013 (Anner, 2018). The impact of the continual squeeze of wages contradict claims that employment in the RMG industry can help alleviate poverty, as wages in the industry cover just 14% of living expenses, the lowest among garment exporting countries (WRC, 2013). A clear example of global labour arbitrage was demonstrated after the Triangle Shirtwaist fire in the United States, as female garment workers from the factory responded by mobilising, demanding change and setting up their own union. In response, production was moved to non-unionised states in the USA and then to countries including Bangladesh, in order to gain from the cheaper workforce. This led to the rapid expansion of the RMG-industry in the Global South. Such a structural difference between Northern companies and Bangladeshi suppliers, in which Northern brands hire Bangladeshi suppliers and workers to produce for them, creates a relationship of dominance and subjugation, allowing Northern brands to reap more profit than those who organise the very labour they profit from (Smith, 2014).

 

This exploitative relationship not only benefits MNCs, but research has found that it directly benefits Western states too. Norfield (2004) found that a significant proportion of revenue from the retail price of clothing goes to the state in taxes, who receive a greater proportion of profit than MNCs. This is used for the benefit of the state, for example, for its health care and social security, while a small proportion may be spared as foreign aid to the very countries the Western state is exploiting. For example, for a standard H&M T-shirt sold for €4.95 in Germany, 0.95¢ remained in Bangladesh, shared between the factory owner, workers, suppliers of other services involved, and the Bangladeshi government, contributing to Bangladesh’s GDP. The remaining €3.54 counted towards the GDP of the state in which it was consumed. This resulted in H&M making 60¢ per shirt, and the German state acquiring 79¢ through VAT. Therefore, with continually decreased price margins, at the expense of workers, this allows Western states to benefit further from this extraction of profit.

 

Therefore, while employment rates may be high, and statistics may show significant improvements in the economy, it is through the RMG- industry that the West exploits the resources of Bangladesh. Western states and MNCs rely on Bangladesh’s dependence on the competitive market to ensure maximum profits from workers, thus intentionally denying opportunities for the country to develop to a point where reliance on the West is no longer required.

 

In conclusion, it is clear that there may be some successes in development with the emergence of the RMG-industry in Bangladesh, particularly in terms of women’s increased agency in the midst of traditional patriarchy, and providing a means for the impoverished to provide for themselves. However, one cannot deny the exploitation that forms the very existence of the RMG-industry in Bangladesh. The subjugation of Bangladesh to MNCs and Northern states via the industry has demonstrated its devastating impact on its ability to promote development, from the relentless abuse of women, to the continued extraction of profit regardless of the impact on workers. This therefore suggests that the RMG-industry, while presented as a means of empowerment and economic success, is simply another means through which imperial powers can maintain control over the Global South, ensuring the continued extraction of its resources, regardless of its impact.

 

As this month marks the fifth anniversary of the Rana Plaza collapse, we must remember that such incidences are far from industrial accidents. They are the product of a capitalist, imperial regime implemented by the West, that systematically oppresses the Global South under the facade of ‘development’.

 

 

 

 

 

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