Arson, anarchy, abdication of leadership in the garments industry

The Bangladesh Nationalist Party General Secretary and a prominent cabinet minister in the present government has, according to press reports, said that "local and foreign conspirators" might be behind the present outbreak of violence in the industry. This reminds one of the instant response of the party in power to the spate of bombings by Islamic fundamentalists last year. The opposition, possibly in league with some foreign powers, so the unfounded allegation went at the time, was behind these bombings. This time too the party has found scapegoats in dreamt-up conspiracies to destabilise the garments industry.

The leadership of the industry, for its part, has been beating its breast and pointing a finger at the government for not doing enough to maintain law and order in the factories. In what must be called a pathetic display, industry leaders in immaculate white shirts were seen lying on the not all-too-clean streets of Dhaka in protest against government inaction.

But don't we urgently need some introspection too? The garments industry has been one of the best things that have happened to the economy of the country. Thanks to some pioneering work in the 1970s and 1980s and some benign forces of comparative advantage in international trade, the industry is now by far the largest source of industrial employment in the country as well as its largest foreign exchange earner. Yet how have we viewed the sources of success of the industry?

The bulk of the attention of industry leaders and other policy makers has always centred round questions of access to foreign markets. This was evident, for example, in the anxiety often expressed not so long ago over the fate of the industry after the termination of international Agreement on Textiles and Clothing on January 1, 2005. The erosion of preference received in developed countries generally has long been a considerable source of angst. In the event, they and other doomsayers were proved wrong. Exports of garments from Bangladesh continued to grow strongly.

There can be no disputing the importance of the question of market access for an industry that is primarily meant to cater for foreign demand. But the inherent strength of the industry to compete for markets lies at home. It would indeed be ironic if the industry leaders were to be seen as propagating the view abroad that the industry was in some sense weak and needed special market treatment, and at the same time sapping the inherent strength of the industry at home by their policy or the lack of it.

That strength of the industry is derived from the central role of labour in the production process, where it is translated into low labour cost. This must look like a trite proposition. But the crux of the present domestic problem of the industry lies precisely in this critical question: how did the industry leadership view the role of labour in the continuing strength of the industry in international markets?

Labour-management relationship in the industry has long remained a dangerously neglected area of policy decisions. Considering the importance of labour in the industry, the danger should appear more than usually large. To the owners of an unconscionably large number of garments factories, labour wellbeing probably appears at the bottom of the list of management priorities. Over the past decade hundreds of garments workers have been killed because of management failures, not the least of which were the numerous lapses in safety measures that have led to devastating fires and deadly stampedes. Collapsing factory buildings have led to many more deaths. Inhumane working conditions may have been silent killers in many factories. There are numerous reports of wages being unpaid or underpaid. While not all industry leaders fit the description of the Dickensian factory owner, many undoubtedly do.

That is the crux of the problem in the industry today. Which also suggests that there is an enormous scope for improvement. Perhaps a beginning should be made with the recognition that real wages of garments workers needed to increase with improvement in their productivity. There is little doubt in my mind that such productivity has increased over the years, without there being any significant increase in real wages. One does not need sophisticated data to see this. Perhaps the most important improvements in labour productivity come by way of what economists call "learning by doing". There are ample reasons to believe that years of work experience have led to significantly improved productivity of the work force in the garments industry. It is time to recognise this and pay workers better real wages, pay them their due, and pay them on time. This should in turn lead to further improvement in labour productivity and strengthen, and not diminish, the competitiveness of the industry.

The neglect of these issues by industry leaders and other policy makers lies at the heart of the present problem. Conspiracy theories would not help. Nor would calls for measures of law and order. The return of a relative calm in the factories must not divert attention from the real problems that have been allowed to fester for so long.

Mahfuzur Rahman is a former United Nations economist.