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Mahesh

21/11/23 06:43 AM IST

The impact of Bangladesh’s garment workers strike

In News
  • Recently,one of Bangladesh’s largest labour forces — the 4.4 million-strong ready-made garment (RMG) sector workers are demanding a trebling of their legally mandated minimum wages from 8,000 Bangladeshi Taka (BDT), or about $72, to 23,000 taka ($208).
Fashion Economy of Bangladesh
  • Bangladesh is the world’s second-largest exporter of fast fashion, or RMG, after China, accounting for 85% of the country’s exports earnings of $55 billion in 2022.
  • It has a global market share of almost 8%. The RMG sector’s main markets are the U.S., the U.K., Europe and Canada, with H&M being the top importer. Other big brands include Levi’s and Zara.
  • The 4,000 odd manufacturing facilities in the RMG sector are largely small and medium enterprises (SMEs), mainly employing rural women, and it has been credited with helping the country’s drastic reduction in poverty from 44.2% in 1991 to 5% in 2022 based on the international poverty line of $2.15 a day (using 2017 Purchasing Power Parity exchange rate).
  • Rising remittances by a growing emigre population is the other factor contributing to the government’s foreign exchange.
Reason for protest
  • It has been over five years since 2018, when Bangladesh’s Minimum Wage Board fixed a rate of BDT 8,000 for fast fashion sector workers.
  • Unlike a universal base wage, Bangladesh follows a system of setting minimum wages for each sector of the economy, which is revised every five years.
  • In the past four years, the country has witnessed steep inflation exacerbated by the COVID-19 pandemic, and more recently, the volatility in oil prices fuelled by the Russia-Ukraine war.
  • The country’s apex bank, the Bangladesh Bank, has pegged inflation of a 12-month, monthly average at 9.37% in October 2023, which is a more than 2% point rise from 7.23% in the corresponding period last year. This has priced out essentials like food and fuel for a vast number of Bangladeshis.
  • Several economists, including the Bangladesh Institute of Labour Studies peg a minimum monthly living wage at BDT 33,368 ($302), for garment workers in a January 2023 report.
  • Moreover, Bangladesh’s foreign exchange reserves have more than halved from a high of $48 billion in 2021 to less that $20 billion in mid-October of this year.
Relationship between the RMG sector and carbon emissions
  • According to the UN Environment Programme, the fashion industry is responsible for anywhere between 2-8% of global greenhouse gas emissions, making it “one of the largest contributors to the climate and ecological crisis”.
  • In Bangladesh, the textile and RMG sector combined constitute more than a quarter of the country’s total emissions as on 2020, with an average annual growth rate of more than 8% CO2 emissions in the past two decades alone.
  • According to the Green Climate Fund, a donor base for developing countries to realise their decarbonisation and climate resilience measures, Bangladesh’s RMG facilities “are not operating efficiently because of continuous usage of old and badly maintained machines, coupled with poor energy management...textile and RMG manufacturers face several barriers to investing in energy efficiency including inadequate financial incentives, lack of technical expertise and the lack of an enabling environment.”
  • Yet, Bangladesh has the maximum number of U.S. Green Building Council certified RMG factories globally.
  • While 202 facilities out of more than 4,000 is a good start, there is still a long way to go to be on track to realise the country’s 15% reduction in greenhouse gas emissions by 2030.
  • While top global fashion brands recognise these gaps in financing, technology, governance, and the fragility of highly climate vulnerable economies like Bangladesh, their response to the current RMG sector crisis and decarbonising their own supply chains, at best, could be described as wanting.
Source- The Hindu

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