Anu Muhammad

After independence, all governments, civil or military, did all they could to capture these trade unions. They even resorted to violence and killing to gain control and instal corrupt persons in the trade union leadership. Abuse of trade unions went to its extreme during the 1980s under military rule, with general Ershad in the saddle. With the co-option of labour leaders

Bangladesh’s ready-made garments industry has taken the low road to competitive advantage. Local capitalists, the big retailers and western governments are reaping the benefits of the super-exploitation and repression of the (mostly women) workers. Inevitably, the resistance of the victims is taking shape.

Anu Muhammad (anujuniv@gmail.com) is with the Department of Economics, Jahangirnagar University, Dhaka, Bangladesh.

Economic & Political Weekly

EPW

August 20, 2011

T

he annual turnover of the readymade garments (RMG) industry in Bangladesh is now almost $9 billion; it employs around 3.5 million workers, more than 80% of them women. RMG account for nearly 80% of the country’s export earnings and are the second largest source of the nation’s foreign currency after remittances. According to official estimates, nearly 4,500 garment factories are now in operation in the country, some of these factories work as subcontractors of the bigger ones. Over 70% of these factories are located in and around Dhaka, the capital city. The rapid expansion of this export-oriented industry has given the industrial sector a new landscape. The RMG industry has also created a huge labour force, mostly women, with lower wages and severe regimentation. Many workers were tortured and killed for their attempts to organise struggles for rights and decent levels of living.

Neo-liberal Agenda

As a newly independent country, Bangladesh inherited some big industrial enterprises in jute, textile, steel and sugar. Most of these were initially established with state patronage or with huge subsidies, and later owned by Pakistani big business houses. They were abandoned by them after independence in December 1971, and nationalised in early 1972. These enterprises formed the industrial mainstay of the newly independent country. They had strong trade unions mostly organised by the left parties. Workers of these big enterprises, located mostly in Dhaka, Khulna and Chittagong, had been organised and were politically active since the early 1960s. They played a crucial role in the political movement against military rule led by general Ayub Khan, the mass uprising in 1969 and later, the war of independence in 1971.

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COMMENTARY

One of them is weak backward linkages Garment and Leather Worker Federation, that created high dependence on imported in February 2005, “a garment worker in items, including cloth. The problems of Bangladesh received only 6 cents as wage to assert its rights, and forced to accept low wages.

Year	Number of	Employment	RMG export	RMG Share
enjoyed policy and material support from	Factories	(million)	($ million)	in Total Export stan, 30 cents in China,
both the government and the international			Earnings (%) 40 cents in Sri Lanka and
financial institutions. It also had other 1980-84 (annual average)	-	-	10.68	1.50 78 cents in Thailand”
favourable factors including quotas under 1983-84	134	not available	31.57	3.89 (Asian Tribune, 28 May
the multi-fibre agreement that ensured an 1985-89 (annual average)			290.30	27.10 2005). According to the
international market. The new rich were 1989-90	759	0.34	624.16	32.45 International Labour
looking for high-profit investment oppor1990-94 (annual average)			1,134.90	55.90 Organisation (ILO) web
1995-96	2,353	1.29	2,547.13	65.61
tunities; they became the new owners. A 1997-98	2,726	1.50	3,781.94	73.28 site (2009), the average
huge pool of unemployed young women 2000-04 (annual average)			4,878.40	75.40 monthly wage in PPP
from poor families, ready to work for rock	2005	3,100	2.00	6,428.10	76.20	terms was the lowest in
bottom wages and longer working hours,	2006	3,300	2.20	7,902.30	75.20	Bangladesh. The annual

The evolution of the export-oriented RMG industry in Bangladesh coincided with these reforms. The new industry

Table 2: Ready-made Garments Industry in Bangladesh – Employment and Export Earnings

per hour, compared to 20 cents in India and Paki

made up the new workforce.	2010 4,500 3.50 8,906.78	77.17	minimum wage (PPP $ as
	Source: BGMEA, BIDS (2000), CPD (2008), Economic Review (2010).		per the ILO’s Global Wage
Favourable Incentives	Table 3: Terms of Trade in General and with Respect to Apparels		Report 2008-09) in dif-
Since early 1980s, all governments kept	Year Export Price Import Price Apparels Price Terms of	API/MPI*100	ferent countries are as
offering a longlist of incentives for exportoriented industries and foreign invest-	Index Index (MPI) Index (API) Trade 2000 100.00 100.00 100.00 100.00 2001 102.40 107.53 100.82 95.24	(ToT Apparel) 100.00 93.77	follows – Taiwan: 955, China: 204, Cambodia:
ment. For export-oriented industries these	2002 104.82 115.61 84.90 90.67	73.43	156, Indonesia: 142, Viet
incentives included duty-free import of	2003 107.44 124.57 83.14 86.25	66.74	nam: 120, Pakistan: 118,
capital machinery for 100% export-oriented	2004 115.07 129.62 80.34 88.78	61.98	India: 113 and Bangla

industries outside the export processing 2005 118.82 134.21 77.87 88.54 58.02 desh: 69.

zones (EPZs), creation of an export promo-2006 121.18 139.50 74.25 86.88 53.23 The new minimum

tion fund (EPF) for product development and market promotion of new items, exemption from payment of 50% of income tax on income derived from export, exemption from payment of import license fees by exporters who bring in raw materials exclusively for export production, and retention of up to 10% of earnings for general business purposes (soon to be raised to 20%). In later years, garment exporters could get further benefits and favours from governments.

By the 1990s, it became clear that the old industries were dying and exportoriented industries and construction material showed strong and steady growth (Table 1). By ensuring steady growth, the RMG industry became the single largest source of export earning and also the largest employer in the industrial sector by the early 1990s (Table 2).

Nevertheless the RMG industry has its own constraints and unfavourable factors.

2007 127.06 144.58 71.25 87.88 49.28 wage declared in July 2008 131.53 149.55 70.77 87.96 47.32

2010 is still a malnutri-

Source: CPD (2010).

the manufacturing sector, in general, and the textile industry, in particular, had its effect on garments. Moreover, relative price erosion of own products in relation to imports from the “centre” economies has not changed in the case of RMG or apparel. Tables 3 and 4 reveal the deteriorating terms of trade for peripheral economy in general and RMG in particular in the global context.

High Profits, Low Wages

From the very beginning, unit labour cost in Bangladesh was the lowest compared to other RMG producing countries. During the 1990s, unit labour cost in Bangladesh was $0.11 ($/shirt), whereas the same was

0.26 in India, 0.43 in Pakistan and 0.79 in Sri Lanka (BIDS 2000). According to the Brussels-based International Textile,

tion wage, and it is still the lowest wage for garment workers in the world. Workers actions have forced the owners to revise the existing wage structure, in 2006, and again, in 2010. However, in both cases, owners, in association with the governments, could suc-

Table 4: Dozens of RMG Required to Purchase Import Items

Import items	2006 (avg)	2008 (avg)	2009 (June)
1 barrel of oil (fuel)	2.34	3.44	2.03
1 tonne of rice	10.97	23.18	21.86
1 tonne of wheat	7.07	11.25	8.31
1 MT of soybean oil	21.19	39.12	26.28

Source: CPD (2010).

cessfully keep the real wage very low. As shown in Table 5 (p 25), compared to 1993, in US dollar terms, the 2006 wage decreased for grades 1 to 6. The minimum wage (grade 7) increased slightly between 1993 and 2006 (by 2.9%). It should be noted here that since the exchange rate of the

Table 1: Growth and Atrophy within the Manufacturing Sector taka with the $ between 2006 and 2010

Growth Pole Industries

has been stable, it appears to give a better

Positive growth; high range (more than 10%) cement, mild steel rod

picture in US dollar terms. But, between

Positive growth; low range (less than 10%) garments, tea, beverage, soap and detergent, leather and leather products

these two years, the price level has

Negative growth; high range jute textiles, fertiliser

increased by more than 50%, indeed, the

Negative growth; low range sugar, paper, iron and steel Source: Summarised from Bakht (2000). price of rice increased by more than 100%.

August 20, 2011 vol xlvI no 34

COMMENTARY

If we consider the price level, especially prices of the main essential goods consumed by low-income earners, then the real wage is lower at the new nominal wage in 2010.

With income much below the poverty line, garment workers are at starvation levels of living. Various studies indicate malnutrition, disease and ill-health caused from over work, going hungry or low food

Table 5: Wage Structure in 1993, 2006 and 2010

to identify and count the dead and injured, and to make a claim for compensation. The owners had every reason to take those cards away. Possible claims for compensation also explain the unwillingness of many employers to give appointment letters to the workers.

Since the early 1990s, more than a thousand people, mostly teenage girls, lost their lives in different garment facto

ries because of either

Grade	Wage, 1993 (in $) Wage, 2006 (in $)	% Change in	New Wage Scale Supposed To Be	fire, or collapse of an un
1$ = Tk 40	1 $= Tk 69.46 Wage in $ between Implemented from November 1993 and October 2010 2010 (in $), 1 $= Tk 70	authorised factory build
Grade-I	117.5	74.0	-37.0	132.86	ing, or secret killing by
Grade-II	85.0	55.3	-34.9	102.86	goons or in police firing.
Grade-III	52.5	35.3	-32.8	58.86	Some factories reported
Grade-IV	42.8	32.4	-24.2	53.76	ly kept their gates closed
Grade-V	36.3	29.5	-18.7	49.36	during fire incidents. On
Grade-VI	33.0	26.7	-19.2	45.86	6 January 2005, during
Grade-VII	23.3	23.9	2.9	42.86	a fire at Shaan Knitting

Source: BGMEA website, CPD (2008) and newspaper reports.

intake, and suffocating shelter (BIDS 2000; Muhammad 2007a; Sobhan and Khundker 2001; Sweatfree 2010). But this is not the end of their suffering – they face abuse in the workplace, sexual harassment and rape, and even death.

Death Trap

On 23 February 2006 a fire broke out at KTS Garments in Chittagong. Special arrangements were made on that day for an emergency night shift; food was arranged for about a thousand workers. But how many of the workers could escape the deadly fire? Nobody knows for sure, even today. I personally visited the factory three days after; yet I met many who were looking for their daughters, sisters or relatives who were working in that factory. Even after three days nobody was allowed to enter the factory. I managed to take a quick look in different areas up to the third floor. Hundreds of small bags usually carried by female workers were here and there. I found those totally empty. Who have stolen the “precious” things from these bags? No one was allowed to enter after the fire broke out; the factory was strictly guarded by police and the Rapid Action Battalion (RAB). The workers did not have much money to be looted. The only thing they had – very important to them – was their ID card, which was the only proof of their identity and their link with the factory. That was the main proof

and Processing in Narayanganj, all the gates of the building were kept locked. The incident claimed 23 lives.

The collapse of a nine-story garment factory building at Savar near Dhaka on 11 April 2005 caused more than 100 worker deaths and another 100 workers missing. Suddenly turned into a mass grave, the factory had been producing nearly 80,000 items of clothes annually for the markets of Europe and the US. This building was constructed without proper authorisation.

A fire in a building that housed Saiem Fashions and other garment facto ries, killed three workers and injuring 50 in March 2006. Three more factory accidents occurred in early 2006, two in Dhaka and one in Chittagong, leaving at least 142 workers killed and more than 500 injured many of them disabled for life. Newspaper reports made it clear that all these accidents took place due to lack of proper safety measures at the factories. These reports also revealed the fact that

according to official statistics, only three inspectors are engaged in inspecting safety measures at as many as 15,000 factories under the Dhaka divisional factory inspection office. And only 20 inspectors are now deployed to inspect around 50,000 registered factories in the country – four of them are working at the head office, six at the Dhaka divisional office, and three at Chittagong, Khulna and Rajshahi divisional offices (Daily Star, 28 February 2006).

The following list of factory fires and deaths was published in The Daily Star on 27 February 2010 after another deadly factory fire. The list includes: 32 killed at Saraka Garments, Dhaka, 1990; 22 killed at Lusaka Garments, Dhaka, 1996; 20 killed at Jahanara Fashion, Narayan ganj, 1997; 24 killed at Shanghai Apparels, Dhaka, 1997; 12 killed at Globe Knitting, Dhaka, 2000; 23 killed at Macro Sweater, Dhaka, 2000; 23 killed at Chowdhury Knitwear, Narsingdi, 2004; 23 killed at Shaan Knitting, Narayanganj, 2005; 62 killed at KTS Garments, Chittagong, 2006. Clearly, the list was incomplete and the number of deaths was underestimated. The same report also referred to fire service officials saying that “a large number of garment factories do not have emergency lights, which can be turned on without electricity during the crisis. This is why the whole factory falls into total darkness during a fire.”

On 12 December 2010, police opened fire on garment workers of a factory owned by a South Korean group in Chittagong, killing at least three. The firing took place during several days of protest in which thousands of workers participated. They were protesting the factory owners’ refusal to pay the wage agreed earlier. Two days after the police killings, a fire in the Ha-Meem clothing factory in Ashulia near Dhaka killed between 26 and 31 workers and injured at least 100 more. The exact number of dead in both the fire and the police killings has not been clear till today (Daily Star, 27 February 2010). Although all these untimely deaths of young workers were caused by negligence or greed of the management, no owner has faced any legal action by the government till today. It has been repeatedly proved that the capitalists have the police on their side;

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August 20, 2011 vol xlvI no 34

force has been formed, obviously not to save the workers from atrocities but to suppress them.

The power and influence of garment factory owners is evident in the building that houses the headquarters of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), which was built on wetland and without an environmental clearance. One prime minister, Sheikh Hasina laid the foundation stone of the BGMEA building on 28 November 1998; another prime minister, Khaleda Zia inaugurated this complex on 8 October 2006. The building was constructed by grabbing common lands and a lake.

Revolt against Injustice

The feminisation of the working class was a product of the systemic process of keeping wages low and ruling the workplace with an iron hand. However, the women workers became a new social force in the labour movement. In the absence of legal trade unions, workers looked at other ways to organise and exercise their rights.

Therefore, although RMG workers do not have trade union rights, they have created the strongest workers’ mobilisation in recent years in Bangladesh. The causes behind their anger have been (i) low nominal wages in times of increasing cost of living, (ii) non-payment of wage arrears and compensation for overtime work,

(iii) absence of job security, (iv) lack of workplace security, (v) lack of holidays, including weekly ones, (vi) verbal and physical abuse, including sexual harassment and rape by management or by hired goons (mastans), (vii) long working hours (12 hours a day), and (viii) killing by negligence or by torture.

Both the frequency and intensity of workers’ protest have increased in recent years. From 20 to 23 May 2006, an unprecedented workers’ revolt seized the capital city of Bangladesh. A national daily reported that

the agitated workers had reportedly set 14 factories on fire and damaged some 70 others, including about 30 in the EPZ in Gazipur between 20 and 23 May. The labour unrest caused deaths to three workers, injuries to the area, burning down thousands of pieces of finished products along the way (New Age, 28 May 2006).

A long time before these outbursts, workers in different factories had been trying to make owners hear their demands, including payment of arrear wages, an eight-hour working day and weekly holiday. In response, owners tried to suppress workers by threat, using hooligans and police. Several confrontations between workers and police/hired goons took place in different areas.

The Bangladesh Institute of Labour Studies (BILS) counts 358 incidents of garment-worker unrest, injuring 2,395 workers in 2008 (New Age, 2010). In 2009, six garment workers were killed during demonstrations over unpaid wages. From January to June 2010, there were more than 80 incidents of labour unrest. At least 988 workers were injured in clashes with the police during this period. “Workers protested non-payment of wages, mistreatment, curtailment of leave and holidays, and the sudden closure of factories without paying workers their due wages” (Alam 2010).

On 20 June 2010, an uprising of tens of thousands of workers in the Ashulia industrial area began with 7,000 workers at a Nassa factory. They were demonstrating for a 5,000 taka (nearly $72) minimum wage. According to newspaper accounts,

three hours of sporadic street battles ensued in which workers erected blockades and burned tires and scraps of wood while police fired rubber bullets, lobbed tear gas shells and used water cannons to disperse unruly workers.

The following day, police filed charges against 3,000 to 4,000 unnamed workers (New Age, 2010). The unrest spread to other areas and factories. Except garment factory owners, almost every section of the society supported the demands of the garment workers.

On 29 July 2010 owners and the government agreed on a new wage structure with a minimum wage of 3,000 taka (or $42), almost 60% of the workers’ demand. Not everybody accepted the offer. But even then, the owners again failed to implement it. On 12 and 13 December,

COMMENTARY

workers again came out on to the streets demanding proper implementation of the newly declared wage structure. Police arrested and detained many labour leaders including Moshrefa Mishu, Tuhin Chowdhury, Bahrane Sultan, Kalpana and Babul. They were put in police remand and tortured for days. However, the cases filed against them could not stand; they were released on bail after being humiliated and tortured.

Global Dimension of Exploitation

Bangladesh’s RMG factories supply major western clothing brands, including Marks Spencer, Tesco, Gap and Wal-Mart, while paying the lowest wage that garment workers across the world get.

Between January 2010 and February 2011, apparel manufacturers in Bangladesh shipped 5,648 containers that were marked as going to Wal-Mart, Wal-Mart Canada, or contained apparel with Wal-Mart exclusive brand names. 1,073 containers contained other goods that were shipped from Bangladesh to Wal-Mart (Facts gathered by Nick Rudikoff, Change to Win, 8 April 2011).

Monopolies like Wal-Mart and Carrefour use their leverage to beat down prices and wages all over the world. Both called up the Bangladesh government for assurances on deliveries when 1,000 factories were shut down during the strike actions in May 2006. Hence it is true that “behind the low wage scale in Bangladesh is not only the drive of the local capitalists to maximise their profits, but the pressure of the giant retail monopolies like the US-based Wal-Mart Stores, Inc, the world’s largest retailer” (Workers World, 2006).

Recently Douglas McMillon, president and CEO of Wal-Mart International made a short, unannounced visit to Bangladesh. It was 24-hour trip during which he met top leaders of the BGMEA. The Association stated,

by one estimate, 30% of Bangladesh’s garments exports to the US went to Wal-Mart, the world’s largest retail chain. The US is the single largest importer of Bangladeshi garments.... The Wal-Mart CEO came to visit our ready-made garment industry, as Bangladesh becomes one of the important sourcing countries in recent years for the company (BGMEA 2010).

Many global businesses are there to extract profit on the value created by garment workers, and

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for the factory owners the only thing left to squeeze is the wage of the garment worker and they are hardly going to invest money in proper factories with functioning fire escapes and sprinkler systems unless failure to do so precludes them from getting orders. Inevitably, as buyers from our high street stores drive down the price, the slack is picked up by the most vulnerable in the chain – the garment workers (Guardian 2010).

The following account gives an indication of the huge share of the revenue accruing to western states and companies from value of Bangladeshi garments:

The Bangladesh garment industry has supplied products worth of $4.3 billion in the fiscal year 2003-04 to European markets. An example from the Swedish garment market can be used to illustrate the diversity of profiteering that emerges out of the exploitation of Bangladeshi garment workers. An average price of a woollen sweater in Sweden is around Swedish Crown (SEK) 300 (around Taka 2700). Prices of these items are high before Christmas. Most people tend to buy sweaters after the Christmas holidays when these are put on sale at reduced prices. For a sweater sold at SEK 150, the government of Sweden earns 25% (i e, SEK 37) as value added tax (VAT). The Bangladeshi garment supplier sells the item at a price of SEK 35. The lion’s share of the sale (around SEK 77) goes to the Swedish garment importer while the Bangladeshi worker does not earn even half of one SEK. While both the Bangladeshi exporter and the Swedish importer can incur some expenditure, the government of Sweden, without encountering anything, earns 75 times more than that earned by the Bangladeshi garment worker. This is a source of income of the Swedish government that emanated from the exploitation of poor garment workers of Bangladesh and is used subsequently to provide [a] high standard of living for its own citizens who are immensely happy to enjoy high quality garments at a bargain price (Muhammad 2007b).

A similar appropriation of revenue is also found in the cases of supplies of RMG to the United States and Canada. To put the case in simpler terms, it may be said that for every garment that is sold at $100 in the western market, the governments of those countries get $25, the foreign buyer makes $50 and, of the rest, a little more than $24 goes to the owners, raw material suppliers, etc, while the workers get less than one dollar.

During 2009-10, Bangladesh exported nearly $8 billion worth of garments to Europe and north America. The value-added tax revenue accruing to the governments