The Bangladesh Juggernaut

As Bangladesh forges ahead towards attaining the status of a middle-income country, it is taking measures to counter stagnation in its ready-made garment (RMG) sector by keeping a step ahead of the anticipated international trends and requirements.

By Mir Adnan Aziz | June 2023

Land of the golden fibre – in our schooldays, this line immediately conjured up the name of what was then East Pakistan. Those were the years when East Pakistan catered to 80 percent of the world’s jute requirement. Today, Bangladesh, a country that produced merely 100.7 thousand cotton bales last year, insufficient even for a single spinning mill, is one of the largest contributors to the global ready-made garment (RMG) sector.

RMG’s account for 84 percent of the country’s total export and are the mainstay of its 460.75 billion dollar economy. The RMG proceeds for 2022 stood at 34 billion dollars whereas those through the six month period of July-January 2022-23 reached at an impressive 27.42 billion dollars. The ambitious target by 2030 is set at a whopping 100 billion dollars.

Bangladesh boasts over 3,500 RMG factories with over 4 million workers exporting their wares to about 167 countries. Bangladesh is now a leading sourcing destination for over 300 global retailing giants, including Amazon, Adidas, JCPenney, IKEA, Wal-Mart, Tesco, M&S, Zara, Uniqlo and Primark. As the US-China trade tensions rise unabated, the American fashion companies are reducing their dependence on China and are shifting their orders to Bangladesh. Analysts see Bangladesh producing 10 percent of the world’s apparel in a few years and overtaking China as the world’s largest RMG supplier.

Since 2014, the Bangladesh economy has increased by 287 billion dollars. This achievement is all the more phenomenal given that in April 2013 Bangladesh underwent one of the worst industrial disasters in history. Rana Plaza, a multi-storey building housing several garment factories, was reduced to rubble after a fire. A total of 1138 workers perished in the devastating accident. This tragedy, resonating globally, exposed the adverse working conditions of the Bangladesh RMG industry. It brought to fore the deaths, accidents, poor working conditions and safety issues in Bangladesh’s apparel industry evoking strident calls to rectify the same.

Taking the challenge head on, the aftermath saw the emergence of one of the toughest factory safety agreements anywhere in the world. In a herculean effort it brought together brands, manufacturers and union leaders to chart out a remedial course so as to avoid future disasters.

The ground-breaking Bangladesh Accord came into force giving labour unions far greater say and holding fashion brands accountable for safety standards in their sourcing factories. Over 220 global brands signed on to the accord. Renewed as the International Accord in 2018, its remedial measures led to the closure of hundreds of unsafe factories and legally bound the importing brands to pay for safety inspections and remedial measures. This has, since, led to over 56,000 safety inspections in more than 2400 garment factories resulting in 140,000 safety improvements. Leading brands also contributed to a 30 million dollar compensation fund for the families of the people who died or were injured in the Rana Plaza disaster.

International oversight agencies have lauded the reformative measures. A recent McKinsey report describes Bangladesh’s present RMG sector as a front runner in safety standards and responsibility. It also highlights the fact that more than 1,500 RMG factories are certified by the Global Organic Textile Standard, the second highest number for any country in the world. These factories are not only safer, but more efficient and eco-friendly. QIMA, a Hong Kong-based supply chain compliance solutions provider, ranks Bangladesh almost closing the gap in Ethical Manufacturing with the globally first rated Taiwan. Before the Rana Plaza disaster, Bangladesh had merely two green factories. Today, it leads the world with the US Green Building Council certifying a total of 157 factories as Leaders in Energy and Environmental Design. Among these, 47 are platinum and 96 gold-rated units.

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