RMG sector in trouble in Bangladesh

by Salah Uddin Shoaib Choudhury
June 23, 2010

http://www.weeklyblitz.net/812/rmg-sector-in-trouble-in-bangladesh

Readymade garments and textile sector, which earns huge amount of foreign currency for Bangladesh every year is now under acute crisis following labor unrest, mostly instigated by a leader of Communist Party in the country. On June 21, 2010, leaders of Bangladesh Garments Manufacturers and Exporters Association [BGMEA] decided to shut down 300 factories at Ashulia export processing zone area [near Dhaka city], following days long labor agitation and destructive acts. According to experts, such closure for indefinite period will put the entire export trade of Bangladesh from textile and RMG sector into huge risk, as many of the exporters will fail to ship their consignments to prospective buyers on time.

Bangladeshi entrepreneurs are already facing severe competition from exports in Vietnam, Cambodia and Indonesia. China will gradually lose the international market of textile export as labor cost in that country is increasing in recent months. This could be an excellent opportunity for Bangladesh in grabbing larger stake in the international market, if there would have been no such crisis created by hand-picked number of RMG workers mostly used by Communists and leftists.

Bangladesh Garment Manufacturers and Exporters Association [BGMEA] decided to close all apparel units in Ashulia for an indefinite period in the wake of labor unrest that injured at least 200 people. The decision came at an emergency meeting of the association and it reasoned out that the continuous unrest spread jitters among garment entrepreneurs.

Ashulia, an industrial belt, turned into a battlefield with several thousand garment-workers blockading the busy road and vandalizing vehicles. The workers demanded TK 5,000 [US$ 72] in minimum wages.

At least 20 police personnel were among the injured after clashes raged between the workers and law enforcers.

The areas troubled by the labor unrest include Jirabo, Narasinghapur, Ghoshbagh and Baipail.

Police and locals said the trouble originated from Ananta Garments in Nishchintopur, where workers demonstrated for a three-fold pay hike to US$ 73 per month. The violence spread as a group of workers from a nearby factory broke into a Ha-Meem Group factories during the lunch break, said witnesses.

Delwar Hossain, deputy managing director of Ha-Meem Group, said the 'outside workers' assaulted one of his line chiefs, as the officer tried to keep them from rampaging into the apparel unit.

"The line chief was severely injured. Worse still, the agitators did not let him go to hospital for hours," Hossain said.

Police said Ha-Meem officials held a meeting with the agitators to settle the matter, but the effort failed. This prompted the company to shut its factories to avoid further trouble.

However, the agitation spread further when the angry workers came back out on the road and vandalized at least 50 vehicles and around 30 adjacent factories, witnesses said. The workers locked in clashes with the police as the law enforcers tried to obstruct them from blockading the road by firing rubber bullets, teargas canisters and spraying hot water.

Police said some unidentified people set fire to three vehicles of Skyline Garments Limited. Traffic on Dhaka-Tangail and Nabinagar-Kaliakoir highways came to a standstill at the time.

Garment makers expressed concern over the current spell of labor unrest that has been taking a heavy toll on the country's prime export earning apparel industry.

The exporters fear that orders from international buyers may shift to alternative destinations, following continued labor unrest, BGMEA said in an earlier statement.

The statement added that the unrest took place when stakeholders are reviewing the minimum wage structure for garment workers.

BGMEA leaders said production in the factories at Ashulia, Savar and Rupganj has been hampered badly over the last 15 days.

They said the workers are not showing up at work and are involved in the unrest to realise some illogical demands, ahead of the announcement of a fresh minimum wage structure.

Bangladesh government is likely to announce the new wage structure for the garment workers before Eid-ul-Fitr. The unrest is taking place even though owners are now paying the workers according to the rules of the minimum wage structure, the statement added.

The BGMEA leaders also said they cannot produce at full capacity due to the ongoing shortage of gas and power. As a result, they are failing to maintain the lead-time set by international buyers.

Failing on-time production, the owners had to air ship 45,882 tones of apparel items from December 9 to April 10 at a cost of TK 1.3 billion, the statement said.

"If such unrest prevails in the industrial sector, it will erode the confidence level of the entrepreneurs," the statement said. BGMEA sought cooperation from all to save the garments industry, which directly employs 3.5 million workers, the statement said.

The entire situation is real threat to the most prospective industrial sector in Bangladesh. It is alleged that a leader of Communist Part is behind such notoriety in the RMG sector. The ruling government in Bangladesh set Dilip Barua, a leader of leftist party in charge industries ministry. The very appointment of this leftist leader was immediately questioned by most of the entrepreneurs in the country.

For the sake of saving Bangladeshi RMG sector for possible collapse, the government needs to take immediate steps in resolving the crisis in the sector, as the government now needs to assess, if a leftist leader should be allowed to continue in the industries ministry.

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