custody while ill is widely known, as is the death of the 112 workers in Tazreen Fashion, seven female workers in Smart Export, and the death of worker organiser Aminul Islam. The compensation of one lakh taka for each worker after the fire expectedly brought an angry scream from a fellow worker, Is the value of our life one lakh taka? Farida C Khan writes THE textbook version of an export promotion strategy for development sounds like an easy template. Follow what the Asian Tigers (Hong Kong, Taiwan, Korea, and Singapore) did. Their economies all grew manifold beginning in the 1970s due to their increased export production and most other countries might also become middle- or highincome nations if they walk (or better yet, jog up) the same path. This prescription for development was a mantra for decades, and continues to retain gravitas in development policy. This is primarily the case because China, the giant that has dwarfed everyone else through this same strategy, is now the second largest economy in the world, after, of course, the United States.
In Bangladesh, the famous conglomerate Daewoo
Corporation from Korea originally invested in Desh Garments to offshore its production so that it could overcome export quotas faced through the MultiFibre Agreement. Since 1979, Bangladesh has begun to develop its own readymade garments industry, emerging today as one of the largest exporters of apparels in the world. Interestingly, Korea remains the largest investor in Bangladesh, having moved to construction, engineering, and various non-export sectors. But Bangladesh has remained very absorbed in the production of garments. Garments exports are expected to be nearly $20 billion in 2013 and almost 80 per cent of export earnings are from this sector. Along with remittances from the export of labour, Bangladesh is able to use these foreign exchange earnings to meet its import needs and not rely extensively on donors, unless of course the global price of rice or oil rises, or there is a natural disaster, causing a foreign exchange crisis. This description of the garment sector, however, does not tell us the entire story of transformations on the ground in Bangladesh. How did Bangladesh get to be so competitive in this sector? What has happened in this industry in Bangladesh? Much has been written on readymade garments and its evolution. Quality of products has increased,
Bangladesh has moved up the value chain and
while it can do better, we can check the labels at Wal-Mart or more upscale department stores in the US and find Made in Bangladesh along with China and other established producers. Of course, Bangladeshs larger market is the European Union, and it has consistently had difficulty capturing equivalent market share in the US. If we look at the production itself, we find that there are about 4,000 garment factories in Bangladesh and over two million workers are employed in the sector, 90 per cent of them being women. A fellow economist remarked at a recent seminar that the supply of labour to the garment industry is completely elastic, and the pattern resembles the Lewis Model of Development. Remembering Arthur Lewiss famous theory, we note that it says that labour keeps migrating out of the rural areas, supplying as many people as needed for manufacturing, without any increase in wages. Therefore, no matter how much the price of rice increases, rents go up, or bus fares rise, wages tend not to follow equally upwards. In foreign-owned firms, such wages may be marginally higher and paid on time, but over the years, there have been many accounts of workers not being paid wages for several months. These have continued in present times, leading to anger and violence in many
factories, confrontation with the police, arrests, and
frustration for workers. In the Lewis model, wages ultimately rise as development occurs. But we have yet to see that in Bangladesh. In August 2010, garment workers fought tooth and nail to increase their minimum wage to 3,000 takas, well below what would be considered a living wage. With an inflation rate of about 7 per cent each year, the purchasing power of what they earn today is far below what their counterparts made in the 1990s. Bangladesh has one of the lowest wages in the apparel sector of any country in the world. The women, most of whom stitch shirts, pants, and jackets from dawn to dusk, come for various reasons. They may prefer garments to the oppression of captive domestic work for the nouveau riche, of sex work, or even simply choose to work to earn extra income for their families. They may have come because of some sort of distressful situation in their family; and over time, they come because others in their village are also coming. These women constitute the spirited and colorful proletariat in Bangladesh. They walk in large groups so as to keep safe from hecklers, buy consumption items that their mothers never knew, and have paved the path for other women to come out into the public without being considered out of place.
Most garment workers travel by foot, walking over 5
kilometers each day. The discomfort in which they work is notable. First, they are rarely given written contracts so that they do not know if they will be paid or retained at work. The repetitive nature of factory work compared to the multitude of tasks that village life allowed is a strain on the health and many women complain about headaches. Once in the factory setting, they often do not have food canteens and many women suffer from gastric illnesses. This is exacerbated by the unhygienic living conditions in the crowded slums that they must reside in. In the early days in fact all the way up to the 1970s many industries in Bangladesh provided living quarters for workers. While these were basic, they seem luxurious in comparison to any absence of consideration for worker housing today. Lets take that into account the next time we say we have made progress. The issue of overtime is another problem very few workers know what their overtime rate is, and how their overtime hours or pay are calculated. Finally, harassment at work, on the way, often within their communities when they return, are all part of the vagaries of their lives. These are all well documented in the narration of many authors. The story of Moshrefa Mishu who was held in custody
while ill is widely known, as is the death of the 112
workers in Tazreen Fashion, seven female workers in Smart Export, and the death of worker organiser Aminul Islam. The compensation of one lakh taka for each worker after the fire expectedly brought an angry scream from a fellow worker, Is the value of our life one lakh taka? Stripping people of what is certain in their lives, confining them into rooms that may explode into flames and smoke, expecting them to build social capital with unknown workers from villages far away are tall orders for anyone, even if they are in Bangladesh, where lives are many and the devaluation of life appears to be widespread. The government and donors hold the garment industry as the champion of the nation. Export incentives continue to be given to fulfil the dream of industrialisation and the practicality of earning foreign exchange. It has been said that import-substitution industries are not necessarily an efficient choice, export industries are. The clout of labour in often publiclyowned import substitution industries had to be quelled in order to make the country globally competitive. Infant industry protection given to import substitution had to be removed because many of these industries were geriatric. On the other hand, the flexible new export industries earn
revenue for the country and for owners. But, are
workers not part of this industry? Particularly hardworking young females whose lives are given over to these factories? How long will it take to establish acceptable working conditions and pay in garments factories? Are labour safety and compensation not worthy of the governments attention? Bangladesh is able to spend millions of dollars on defence, on bridges that will allow the exports to be shipped faster, and entrepreneurs are able to spend millions of dollars on each home they buy. Why is it that, when it comes to those whose blood and sweat our earnings are based on, we are frugal and we say, Patience, as growth occurs, inequality will one day fade away. Farida C Khan is professor of economics, University of Wisconsin-Parkside, USA
Embedded Autonomy or Crony Capitalism Explaining Corruption in South Korea Relative To Taiwan and The Philippines Focusing On The Role of Land Reform and Industrial Policy