The sights are raw and unthinkable. Over a million square feet of factory space lay charred. Truck after truck of brand apparels just to be exported turned to ashes.
The sights also send out a chilling anxiety over the future of not only the country’s booming garment sector but also the total industrial activities.
Just consider these points — Standard Group is the largest single garment factory of the country. It operated in the most ethical way with full compliance, it treated its workers ethically and it paid its workers dot on time. It can be termed the jewel of the crown for Bangladesh. That jewel is now a smouldering heap.
This criminal act took place at a critical time for Bangladesh garment when it is seeing a fall in exports and orders. Take the last two months’ figures of which are available. From $2 billion exports in September, it came down to $1.6 billion in October. Orders from March next year have slumped because buyers are already worried about the long-drawn political violence in Bangladesh. In fact, if buyers had a ready option, they would have shifted much earlier.
The way the arson on the Standard factories was carried out needs to be very seriously considered. The criminals had spread rumours of workers being killed over the adjacent mosque’s microphone. They had blocked all the roads to the factories with tree trunks so that neither police nor fire fighters could reach there. And then they mercilessly torched the factories.
This all indicates a preplanned attack, not just a spur of the moment decision.
In our view, a few factors have led to such mindless acts. Let’s check them back.
In the past, when many such compliant factories fell prey to such vandalism, we have not seen any firm action by the government. Cases were filed against a few thousand unnamed attackers which ultimately turned out to be a money-spinner for the police. The real masterminds who incited workers in an organised way were never caught.
This has created a feeling of indemnity for vandals. Today they can just walk up to any factory, any building and light it up. The owners have to take it as a cruel twist of fate. They can get no compensation, no justice. This feeling of immunity has been exacerbated by the recent trends of political violence when, in the name of politics, innocent people can be just burned alive.
Secondly, when the new wage was fixed for the garment workers after prolonged negotiations and violence, the knit sector was ignored where workers get paid on the basis of the number of products they make. Here the rate was not adjusted, and we would say out of sheer neglect and foolishness. This kept the anger of knit workers festering which they took it on Standard.
We see a total mishandling of the labour issues here for which the whole garment sector is suffering.
The implications of this latest attack are many. It has shocked buyers beyond any limit. They have got a clear signal that Bangladesh is not a reliable sourcing ground. And they are looking for alternatives.
India, backed by a massive rupee devaluation, is now gaining back its garment exports. It has taken a serious look at its garment sector and has been providing quite a bit of subsidy to the industry.
Many think that Asia is still the place for western buyers to place orders. They found Bangladesh as a secure place. Now that this advantage is being eroded, they will look towards India and Vietnam. Vietnam has its capacity and labour supply problems, but not India.
But, away from Asia, another country is coming up fast and all buyers are drooling over that place – Ethiopia. Ethiopia has seriously taken up the challenge of becoming the next garment spot. It has a young demography with 50 percent population below the age of 25. It has developed its ports and infrastructure, including electricity. It has set up several garment training centres with trainers from Bangladesh as well. It has concentrated on backward linkage with cotton production. It has abundance of sweet water – a must for a garment industry. It is developing land for garments. Its commerce and industry ministry has designated three deputy ministers to address the concerns of prospective investors, including those from Bangladesh. Moreover, IFC has taken a serious interest in Ethiopia.
Maybe Ethiopia will not be ready in a year or two. But it will ultimately offer an alternative in the medium term.
And Bangladesh, if it cannot control such vandalism — the most disturbing thing for any entrepreneur — will find itself in a losing battle. Time is running out fast.
Meanwhile, Sheikh Hasina is upholding the constitution and Khaleda Zia is fighting for a poll-time caretaker government. Neither of them is thinking about the country, whose economy is bleeding and whose ordinary citizens are being killed or burned alive.