Made in Bangladesh: Our garments sold abroad
ZIAUDDIN CHOUDHURY traces Bangladeshi-made apparels sold abroad, back to the first garment industry of the 1970s.
On a wintry morning in 1978 in my office in Chittagong Deputy Commissioner's house, I meet this maverick former civil servant now turned an entrepreneur asking my help to get his imported garment machinery off loaded from Chittagong customs. This was Nurul Quader, a senior colleague of mine, who had left the service to pursue his talent in the private sector, and had hit upon this rather adventurous concept of making readymade garments following the South Korean model. There was some snag in clearing the equipment for the fledgling industry he had set up, which he called Desh Garments. This was done in no time, but for me the million dollar question to him was why at all he had landed in this adventure when he had scores of other opportunities to try his business acumen.
The maverick that he was, Nurul Quader (known as Jhilu Bhai by us younger folks) told me tongue in cheek that it was because all other businesses were already taken. He had to try something untried. My next question to him was about when we would be able to see his industry take off. To this, Nurul Quader gave his characteristic response garbed in a story. He said my question reminded him of the urgency with which he would ask his mother as a young boy whenever he felt hungry, "Where is dinner?" when he fully knew that his mother was still cooking. In his case, he said that he had prepared the stove and the pot, but he was still waiting for the cooks to arrive.
The cooks in the case of Nurul Quader's kitchen (the industry in this case) were the hundred plus workers that he had sent to South Korea for training in making the garment. He had hoped that with the return of these workers, not only would he start up his joint venture (with South Korea) in garments, he would also begin a new industry and open a new avenue of economic growth for the country.
Even after a visit to his new plant later and watching all those new workers running electrically operated sewing machines, I was sceptical about whether an industry could run depending on workers trained abroad. I would be proven wrong. Because, only in a matter of years, through the core group of trained workers and the trainers later brought from Korea, a new generation of workers would be unleashed into the country who would take Nurul Quader's dream to a new and unheard of level.
When Nurul Quader began, garments were a mere spectre in our exports. Jute and jute goods still occupied a big chunk of our exports in the seventies, and fish and shrimp export was just growing. Consider this: In 1976, our country earned a paltry six million dollars by exporting manufactured garments. This was not even two percent of our total exports that year. Today, more than two-thirds of our export earnings -- over ten billion dollars -- are from garments. From the lone pioneer factory that Nurul Quader set up in 1977, we have now more than 3,000 that help us make that kind of money from abroad. From a few hundred workers and later some more that Nurul Quader employed, we have now roughly three and a half million workers -- the majority of whom are women who work these machines day in and day out.
When I first came to US in 1981, I could never imagine that I would see in a garment the label "Made in Bangladesh." Today, thanks to Nurul Quader's efforts, it is impossible to step into a department store in US and not find at least half a dozen varieties of garments labelled "Made in Bangladesh."
All of this, however, is the bright side, the happy side of the story. The garments have brought us money, employed our otherwise unemployable workforce and given us a new avenue of economic growth. On the darker side, the industry has also given birth to the evils of exploitation, poor working conditions and profit maximisation in the wake of development. When people see a thirty-dollar price tag on a shirt made in Bangladesh and sold in a US store, few realise that the average garment worker in the home country is paid less than this sum for a whole month. When people buy a designer outfit made in Bangladesh in an upscale, air-conditioned department store here in US, few people realise that the workers behind this garment toiled night and day cooped up in hot and airless buildings with minimal sanitary facilities. People here rarely read or know about hundreds of workers who perished in factories housed in poorly constructed buildings in the past years in Bangladesh.
Our success in garments happened because the eager entrepreneurs who hung on to the coat tails of Nurul Quader were successful in creating a niche market for their products. It happened because our labour was cheap, and our price was right. It also happened, at least in the formative years, because the importing countries gave us a break with some favourable treatment. It also happened because our manufactures met the standards. But the cheap labour that ushered hundreds of entrepreneurs into this new industry has also been our bane. We may have gone to the limits of squeezing this golden goose.
Workers in the industry lured from rural areas for liveable wages toiled for abominable wages and working conditions for years. After many years of a two-sided battle -- the hapless workers on one side and their employers on the other -- the industry recently agreed to a government proffered wage scale. The workers, however, found this less than their needed minimum. On paper the wages have doubled on average, but in reality it is still a lower than subsistence level wage. The industry argues that in order to remain competitive internationally, further increase in the wages would be unsustainable.
While arguments can be made on both ends of the spectrum, the fact remains that garments are the bread and butter of our export earnings. To sustain this, accommodation needs to be made by all sides. We need to find ways for this industry to prosper and grow, but not all at the cost of the toiling workers.
Labour costs account for only one to three percent of the total cost of a garment. Raising it by another one to two percent will not reduce the profit margin or the competitiveness of our garments abroad. Increase in wages can be offset by raising productivity of the individual worker. This productivity increase can come from improving the working conditions of the garment workers, by taking care of their health and sanitation needs, and, above all, by housing the factories in a safe environment.
A recent study of the readymade garments industry in India on strengths, weaknesses, opportunities and threats to the industry (SWOT) recommended several measures to address these. Poor labour conditions and unfavourable labour laws were cited among the weaknesses. International labour and environment laws were viewed as threats. A quick scan of the industry in Bangladesh may reveal similar results. Our strengths may not be equal to those of India, but our weaknesses and threats would be similar and we should be aware of these. More importantly, our entrepreneurs should seriously view the threats that are looming from other countries. The golden goose may not lay eggs indefinitely unless we wake up to the threats of competition and find other avenues for diversification.
Our opportunities exist in fair and effective use of our labour that has ungrudgingly contributed to the success of this industry. Our entrepreneurs need to use this gift for diverse application and not necessarily contain them within the garment industry. In today's globalisation of trade, investment has flown into countries that have offered a productive and skilled labour force and created a supportive environment for growth of this force. It would be in their own interest and of the country's if the industry owners were to assess the state of the industry and the people who keep it running. To paraphrase our Nobel Laureate Prof. Yunus, for every mouth that we feed, we have two hands. All we need is to train these hands to produce. It took one Nurul Quader to create a new vision to give a new direction to our economy; it will take a thousand others to keep the economy expanding.
Ziauddin Choudhury, a former civil servant in Bangladesh, works for the World Bank in Washington DC.