The sunny picture of the Bangladesh readymade garments sector has changed and the industry is now at crossroads—the time to act is now and cost of inaction could be high, the World Bank has said in its ‘Bangladesh Development Update-October 2013’.
“The deadly incidents of fire and building collapse over the last year have exposed the parlous state of physical and social compliance in the garment industry, placing the country’s primary foreign exchange generator at a historic cross road,” the World Bank report said.
Bangladesh’s garment sector has the potential to become a US$ 36-42 billion industry by 2020 if it can prevent a recurrence of the tragedies seen with the Tazreen Fashions fire and the Rana Plaza building collapse, the report said.
On the other hand, it could fall into a decline by continuing to neglect workers’ rights and safety, thereby prompting buyers to reduce their dependence on Bangladesh or abandon the country altogether, in order to protect their reputation with consumers, the report added.
The industrial accidents have revived concerns over compliance in labor standards and worker safety, and the international community has placed the Bangladesh garment industry under serious scrutiny.
As a result, attention to low worker wages, poor working condition and the violation of workers’ rights has become more pronounced, raising questions about the sustainability and competitiveness of the country’s entire RMG industry.
The report terms non-compliance in worker safety as a collective failure of the manufacturers, the buyers, and the government. It says the buyers have demanded quality at low prices without much regard of the working environment, while manufacturers have cut costs by failing to invest in improving safety and labor standards. Moreover, these failures have been aided and abetted by lax enforcement and regulatory capture by government authorities.
For Bangladesh garment industry, the time to act is now. The most immediate priority for the Bangladesh Government is to ensure enforcement of the steps suggested by foreign buyers, international agencies and domestic regulatory bodies. All the stakeholders need to work together to ensure a healthy and safe workplace, without which it would be difficult for the sector to recover and continue to grow.
On the other hand, the cost of inaction could be high, as if the EU were to suspend Bangladesh’s favored access to its markets, Bangladesh could see its total exports fall by as much as 4.1 to 8 percent, the report said.
