06.04.2020

Bangladesh’s garment sector collapse devastates millions

Bangladesh’s textile sector is highly dependent on demand from Europe and the United States. The economic impact of the COVID-19 pandemic will hit factory workers and especially women.

Photo: Shutterstock, SK Hasan Ali

Seven years after the devastating Rana Plaza garment factory collapse shook Bangladesh, its economy and workers are shaken again. On Wednesday, 25 March, Bangladesh announced an unprecedented 50 billion Taka (around 500 million Euro) stimulus package to support the country’s ready-made garment industry and other export-oriented sectors to cope with the economic fallout of COVID-19. As global consumption is plummeting, the demand for mass consumer products falls. And while the stimulus package is intended to stabilize workers’ wages, the economic disruption already outgrew the rescue package. “Earmarking the amount to pay to the workers was a nice thing, but at best, one month’s minimum salary for some 4 million garment workers can be paid with this amount”, said Mustafizur Rahman, a fellow at the Center for Policy Dialogue in Dhaka.

Bangladesh’s garment sector in crisis

More than one million Bangladeshi garment workers have already lost their source of income and garment manufacturers had lost $1.5 billion in orders before the stimulus was even announced. Most workers in Bangladesh’s garment sector are unable to save any portion of their earnings. With their sole source of income barred, the consequences will be dire.

The FES "Core Labour Standards Plus" (CLS+) project has analysed the role of Bangladesh’s garment sector in the past and proposed policies that would have allowed workers social protection and decent wages (see Linking Trade and Decent Work in Global Supply Chains in Bangladesh). Safety nets are critical to mitigate the worst consequences for workers in the coming recession.

Unions safeguard labour rights

Trade unions and worker organisations are uniquely positioned to effectively reach workers with timely guidance and help to negotiate mutually beneficial agreements with employers regarding safety. The IndustriALL Bangladesh Council, for instance, recommended the following urgent measures:

  • Until the situation gets under control, employers should give workers paid leave;
  • Healthcare and treatment should be ensured;
  • The government should provide cash support to workers;
  • Under the leadership of the Ministry of Labour, a tripartite monitoring task force  including government, employers and unions should be established. 

Now more than ever, the government of Bangladesh, factory owners and brands should work together with independent workers rights’ organisations and trade unions to get through the crisis and ensure protection.

Women are vulnerable amidst this recession

Depending on estimates, between 61 and 80 per cent of the workforce in the garment sector in Bangladesh are women. The sector has been the most important source of formal – even though often precarious – employment, particularly for semi- and low-skilled women. At the same time, the lack of protection of women with long working hours and poor working conditions impacts women’s health (see Feminist Perspectives on the Future of Work in Bangladesh).

Without any form of social protection, a wave of factory closures leaves only few options to women. They could become domestic helpers with lesser pay and increased vulnerabilities or be unemployed in a country with virtually no social security net. For women whose working place was an escape from abusive households, the threat of domestic abuse rises.

The region is particularly exposed to the global recession

Bangladesh exemplifies the struggles many export-orientated countries in the region are already facing or will face soon. The short-term consequences will be severe. Asia’s economies will have to deal with broken supply chains and their restructuring. As multinational corporations put re-shoring, diversification and re-negotiations on their agenda, the workers in the region face an uncertain future.  Trade unions and workers’ organisations must use this disruption to demand better working conditions along rebuilt supply chains. 

 

Iqbal Hossain is a Program Coordinator at FES Bangladesh. He manages the Academy of Work program and the national component of the CLS+ project.

Kai Dittmann works as Program Manager with FES ORCA, where he is leading the regional CLS+, future of work and trade union programs.

 

 

The views expressed in this blog series are not necessarily those of FES.

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