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SPEAKING FREELY
Textile workers' rage rocks Bangladesh
By Farid Bakht

Speaking Freely is an Asia Times Online feature that allows guest writers to have their say. Please click here if you are interested in contributing.

DHAKA - The fearsome black-clad, bandanna-wearing soldiers of the Rapid Action Battalion were out on the streets of industrial towns near the Bangladeshi capital lobbing tear gas and struggling to bring a rapidly escalating situation under control. They joined the police in trying to quell this week's industrial unrest, now being called the most serious in the history of Bangladesh.

Major highways were blocked, scores of factories torched, and hundreds vandalized. Dozens of cars were set on fire, including one in Dhaka's wealthy diplomatic zone of Gulshan. Initial losses have been estimated at US$77 million, and this figure could easily double if many factories are not reopened soon and therefore miss their deadlines for time-sensitive orders.

The human toll is worse. Apart from at least one death and many injuries in the riots, the future of thousands of families remains in doubt. Several hundred factories have suffered extensive damage and many have temporarily closed their doors.

The stakes for the Bangladeshi economy could hardly be higher: ready-made garments are the No 1 industry in the country, accounting for 75% of its exports. More than 4,000 factories employ 1.2 million workers. The sector is irreplaceable.

As Bangladesh's public sector was emasculated over the past two decades, the slack was taken up by small private outfits engaged in small-scale textile production. Such units provide a $6.4 billion export lifeline. Even taking into account the associated import bill, the net foreign-exchange impact comes close to $2.6 billion annually. This dwarfs any other sector. Moreover, the banking, insurance, shipping and urban-property sectors have all piggybacked on the entrepreneurship of the small-time owners, some of whom have expanded into Western markets and become millionaires. Whenever the country is slammed for its high level of corruption and squabbling - even criminal - politicians, the garment industry is held up as a success story.

The rag trade's dark side
But it does not take much effort to discover that there are deep-seated problems in the industry that have been brushed aside for too long. In April 2005, an entire building, housing hundreds of mainly female workers in the outskirts of Dhaka, collapsed. Sixty-four laborers, at work on their machines, were crushed to death, and 84 injured. With unremitting regularity, factories become death traps where workers are locked in and unable to escape fires, or find that fire escapes are non-existent or inadequate.

Incidents like these have had a kind of drip-drip effect on worker morale, and it is not as if there has been no warning of the rising anger. International labor leaders visiting the country left businessmen and politicians in no doubt about the consequences of inaction. Neil Kearney, general secretary of the International Textile, Garment and Leather Workers' Federation, explained that if meaningful steps were not taken to make factories secure, big foreign buyers would eventually shift their orders elsewhere.

The businessmen combine together to clamor for support and benefits, while not acknowledging the gross unfairness of a system where workers in numerous factories are regularly paid two months late. Overtime is imposed and in some cases not rewarded. The real wage has plummeted in an era of rising prices for essential items, such as rice and other basic foodstuffs. Workers pay dearly for rent and electricity in the mushrooming slums. By and large, they are still grateful for the chance to earn a living and prefer to be an industrial worker rather than a domestic maid; their demands have never been unreasonable. But ostentatious consumption by the business elite can be seen everywhere as luxury cars drive to shopping centers and restaurants.

Meanwhile, a group of 100 factory owners marched to the prime minister's office to demand action. Unfortunately, she was otherwise occupied and declined to meet them. At a press conference, the acting president of the Bangladesh Garment Manufacturers and Exporters Association, a Mr Murshedi, went on the offensive: "A neighboring country wants to grab Bangladesh's share in the competitive international market by creating an unstable situation at factories here."

Now, "neighboring country" was a curious choice of words. Did the statement perhaps refer to Myanmar, Bangladesh's neighbor to the east? Of course not: the president was referring to India, but so great is the fear of offending the so-called rising superpower that even when it is accused of the worst crimes, it cannot be named. When a reporter boldly asked whether the real issue might not be wages and working conditions, an imperious reply came back that the workers are "well paid" (at princely wages of $20 a month) and that "outsiders" were responsible. Other well-known business magnates are calling for an investigation by the intelligence agencies. Even non-governmental organizations are under suspicion.

Such is the atmosphere of unreality in which the political and business classes exist in Bangladesh. The issue is a question of weak leadership in the garments industry, which has gone easy on violators of labor standards and soft-pedaled moves to clean up the sector. For years, a sizable minority have been flouting basic rules, even though there were admittedly many others who provided a fair working environment and paid their employees on time (in the context of a competitive and cutthroat industry). While it is unlikely that the industry will fold any time soon, the writing is on the wall.

After the end of the Multi-Fiber Agreement at the beginning of 2005 and the changeover to the new World Trade Organization regime, it was widely anticipated that Bangladesh's booming textile industry would fold. The conventional wisdom had it that Bangladesh was dependent on MFA quotas and that India and China would dominate the new, post-WTO landscape.

In fact, this did not happen; instead, the industry continued to surge, posting 20% annual growth rates this year alone. This led to a great deal of self-congratulation in Bangladesh that now appears sadly premature. The reality is that the rosy numbers owed a great deal more to China's hands being tied by Western protectionism than to ingenuity in Dhaka or Chittagong. The Chinese cannot be held back after 2008, which means vulnerable countries such as Bangladesh and Cambodia have to prepare for a ferocious challenge.

Chaos compounded by political instability
Political uncertainty is compounding matters. Bangladesh is facing months of crisis as the current regime hands over power in October, before going to the polls in January. Electricity blackouts are running at record levels. Ordinary protesters have been shot dead, their only demand a regular supply of electricity. Diesel prices are rising. Gasoline pumps are struggling to cope with demand. Inflation is hitting people hard and the two major political parties engage in tiresome tirades about how to conduct elections. The signs are not good.

Looking back a few years, garment factories came close to collapse during unremitting political clashes and shutdowns, after a farcical election in February 1996. The then-Bangladesh Nationalist Party (BNP) government lost the subsequent elections that year, letting the Awami League into power.

Ten years on, a more grassroots and localized opposition demanding basic services is shaking the tree. The BNP regime today is reeling. The political opposition of the Awami League does not look as if it is orchestrating the campaign. It is not in command - not yet anyway - and it is running out of time. The consequences of street violence are therefore becoming more unpredictable by the day.

Farid Bakht is a columnist and entrepreneur, based in Dhaka and London. He can be reached at faridbakht@yahoo.com.

(Copyright 2006 Farid Bakht. Used by permission.)

Speaking Freely is an Asia Times Online feature that allows guest writers to have their say. Please click here if you are interested in contributing.