The Textile Industry in Bangladesh - Assignment Example

The textile industry in Bangladesh By THE TEXTILE INDUSTRY IN BANGLADESH Historical context Bangladesh is a southern Asian country, bordering India and Burma. It has a population of close to 164 million people. The average growth of Bangladesh economy is 6% yearly over the last 20 years and its population increase is averagely 1.59% yearly. Its manufacturing industry accounts for approximately 12% of the country’s GDP in 2009 and 2010.The textile industry has played a vital part in country’s economy for a long time. The industry accounts for close to 50% of all industrial employment and contributes 5% to the GDP. The industry has nearly 4 million employees, mostly women (Bhattacharya 1998). A whopping 78 % of the country’s export income comes from textiles and apparel. Its apparel exports are worth close to $5 billion annually. It is a top apparel supplier to the U.S and European Union countries. Majority of its exports include viscose filament fabrics, filament fabrics, PV fabrics, synthetic filament mixed fabrics, and fabricated spun yarns. Major garments include knitted and blouses, trousers, etc. There are three categories of the textile industry: 1. Public sector 2. Handloom sector 3. Organized private sector Whereas handloom industry provides employment for a largest population, the private sector is the fastest growing sector in Bangladesh. The billion-dollar industry has blossomed following the expiry of a global agreement on textiles and clothing import quotas that existed since the early 1960’s. However, Bangladesh has a series of health and safety tragedies in the manufacturing of garment and textile. They include garment factory fires and collapses. At least 1800 workers and have died since 2005. An example of this sad history is the highly publicised Tazreen Fashions fire that happened on 24th November 2012 and the unforeseen calamity of the collapse of the Rana Plaza factory complex on 24 April 2013. These two tragedies have resulted into the demise of close to 1,200 Bangladesh has established the Accord on Fire and Building Safety, that is given the mandate oversee that all garment factories are safe workplaces and deal with the difficult challenges facing the garment and textile industry. Forces of globalization provide the most useful insight The rapid and expansive wave of globalization in Bangladesh is associated with development of policies that have opened up economic avenues for the growth of the industry both domestically and mostly internationally. The government of Bangladesh has adopted free- market economic system for the industry in the past few decades, thereby increasing the country’s potential for production and subsequently creating new opportunities for international trade. The government of Bangladesh has also dramatically reduced the barriers of commerce and established international agreements to enhance trade in garment products and investment. Global corporations have seized the opportunity in this lucrative industry and foreign market by building factories and expanding the production and market for textile products(Vaidya 2006). Technology has also played a major role in globalization. Recent advancements in information technology for example have driven the transformation of economic life of all the individual economic actors i.e. producers, businesses (intermediaries) and consumers (customers). Technology has hastened the producing process, diversified business opportunities and facilitated easier transfer of assets especially among far-flung partners (Rahim 2013). Economic & political situation in Bangladesh Individuals who make purchases & give their labor Consumers Close to a third of the population of the country is estimated to live below the national poverty line, while 41% of children below 5 years are malnourished. The male to female population ratio stood at 19:20 in 2007, with a third of the population being under 15 years and half between the 15 and 59 years. The ratio of demographic dependency stands at 76.6 per cent. Judging from this statistic, the country expects a continued heightened population growth, to as far as 2060 – even if fertility rates rapid declines. Workers The estimate by Monitoring of Employment Survey of Bangladesh 2009 is that the workforce is comprised of 53.7 million from the working-age population (15 years plus). Of this, 40.2 million workers are male and 13.5 million are female. The female labour force has experienced an increase of close 12 % between 2006 and 2009, compared to the male labour force that has seen an increase of close to 8%. Therefore, the industry has seen an increase in presence of women in the job market, thanks to various income-generating activities created by microcredit operations on both rural and urban levels. According to previous estimates, about 89% of jobs in the labour market are informal employment. This statistic is more evident where women are more likely to get employment under informal arrangements. Companies who principally seek sales & resources internationally An estimated 20% of existing mills in the country are large-scale mills, with roughly 30 % being medium-scale mills, and the rest being small-scale mills. This number increases daily. The textile quotas introduced under the Multi-Fiber Arrangement on January 2005 have been regular in Bangladesh and the industry remains divided on this effect. Analysts of the industry say that dealers in garment and textile manufacturing will have to outshine competition from countries like, Thailand, India, China and Pakistan due to new policies. However, the textile companies foresee no adverse effect on their business, but they fears China will eventually affect the Bangladesh garment and textile industry (Islam 2007). Host governments Violence rocked Bangladesh political landscape in early 2013 when a war crimes committee established by the government of Sheikh Hasina Wajed (Prime Minister) to look into human rights violations during the war for independence in 1971, handed down its findings. The political volatility is however evident, in the context of general economic and social occurrences of the past decade. The government is responsible for an increase of 10 years in life expectancy while infant mortality has declined by more than half. Female literacy has increased by 200%, and annual economic growth has averaged at 5%. However, Bangladesh remains among the world’s poorest nations. Most people work in the agriculture and garment industry which both account for over 90 % of income from export.. C. Stakeholders (host & home) This section focuses on stakeholder who have a direct effect on labour conditions and the general garment industry.  1. Government Institutions The Bangladesh government is responsible for development and enforcement of new laws and strategies for  promotion,  expansion  and  sustainable  development  of  Industrial  sector  of  the  country 1. The Department of Labour (DoL) 2. Ministry of Commerce 3. The Export Promotion Bureau (EPB)   4. A Compliance Monitoring Cell (CMC)   5. Ministry of Industries Employer’s Organization Association The labour law act of 2006 allows the owners of all mills dealing with the textile or garment with  opportunities  to  form  and  join  organisations of  their  own  choice  with  the main aim of regulating the relationship  between  employers  and  employees  or to other employers.   Trade Unions They are mainly active in formal and regulated sectors of the economy. Most of  informal  sector  employees  and  a  huge  number  of  formal  sector  employees  are not  union  members. Non-Governmental Organizations   International Organisations 1. Oxfam  (GB)  Bangladesh 2. ActionAid  Bangladesh   3. International  Labour Organisation  (ILO)in  Bangladesh Objectives of the Government of Bangladesh Food Security Despite a rapidly growing population, The government of Bangladesh is keen on achieving self-sufficiency in food grain production. It plans to do so by intensifying rice production through HYV and other additional technological advancement such as technologic infusion. Production of fruits , vegetables and spices has also seen significant expansion. The government has also introduced Crop diversification in the country, having added maize and wheat as major crops. The government developed an initiative for horticulture and nutrition development. It has subsequently set up horticulture nurseries countrywide and gone ahead to set-up twelve training and research institutions. This has seen wide production of flowers as a cash crop. The government has also come up with Integrated Pest Management (IPM) countrywide through the enhancement of “Farmers Field Schools (FFS)” in all levels to eradicate harvest and post-harvest losses and better deal with crop production and diversification. Bangladesh has also introduced GIS-based agricultural planning based on the existing agro-ecological zones. Another milestone achievement in agriculture is the enhancement in research and the development capabilities, leading to the growth of various HYVs of rice and other crops as well. Water Security The government has identified untreated water, poor sanitation and hygiene problems are the main factors resulting to poor health in a large population in Bangladesh. The government has initiated massive campaigns at the lowest level in collaboration with NGOs and have yielded some positive results. It plans to do a lot more though. The government intends to avail country safe drinking water to its people by setting up underground water sources. The overall percentage of people with access to safe drinking water in 2009 stood at 86% .The government plans to achieve 100% access to safe water by 2015. Provision of cheap and affordable sources of energy The government of Bangladesh has established the Infrastructure Development Company Limited (IDCOL), which is now the largest supplier of Solar Home Systems (SHS) and biogas stoves in the country. IDCOL has also installed up to 1.4 million SHSs thereby saving tonnes of fuel a yearly and being a source livelihood for up to 70,000 people. The SHS has also set up a US $ 200 million market in Bangladesh via a brilliant financing mechanism, which makes it simpler for the less capable to pay back the in instalments over a stretch of 3 years, though with interest. A few years ago, the government made it compulsory for developers to harness solar power to serve 3% of the entire electricity requirement for all new building before having their electricity connected. This not only reduces the over load on fuel power but also gets developers planning to put up green buildings. The government has made significant progress in harnessing solar and biogas energies, and plans to register the same progress in respect of wind energy. It has already set up few wind turbines to pilot the project, and hope to sustain despite the absence of wind mapping in the country. My evaluation of Bangladesh In my assessment of Bangladesh, I have seen a country with immense potential to rise above its problems. It has the ability to maximize its fortune in its thriving textile industry, if only the country leadership solves the underlying issues facing the industry. From its objectives, I can tell that the country is gearing to embrace development in a very significant way. Only time can tell of the heights this country is bound to reach. References Bhattacharya, D. (1998). Export processing zones in Bangladesh: economic impact and social issues. Geneva, International Labour Office. (2014). Collaboration for Sustainability and Innovation: A Role For Sustainability Driven by the Global South? A Cross-Border, Multi-Stakeholder Perspective. Dordrecht, Springer Netherlands. http://nbn-resolving.de/urn:nbn:de:1111-201311211369. Rahim, M. M. (2013). Legal Regulation of Corporate Social Responsibility A Meta-Regulation Approach of Law for Raising CSR in a Weak Economy. Berlin, Heidelberg, Imprint: Springer. Islam, T. (2007). Microcredit and poverty alleviation. Aldershot [etc.], Ashgate. Ahmed, S. (2004). Bangladesh: past and present. New Delhi, A.P.H. Pub. Corp. Bellamy, A. J., & Williams, P. (2013). Providing peacekeepers: the politics, challenges, and future of United Nations peacekeeping contributions. Edwards, M., & Hulme, D. (1995). Non-governmental organisations - performance and accountability: beyond the magic bullet. London, Earthscan. Employment Promotion, World Employment Programme, & Tripartite Workshop On Social Dimensions Of Economic Reforms In Bangladesh. (1993). Social dimensions of economic reforms in Bangladesh: proceedings of the national tripartite workshop held in Dhaka, Bangladesh, 18-20 May 1993. New Delhi, International Labour Organisation. Streissguth, T. (2009). Bangladesh in pictures. Minneapolis, VGS/Twenty-First Century Books. Vaidya, A. K. (2006). Globalization: encyclopedia of trade, labor, and politics. Santa Barbara, Calif, ABC-CLIO. Read More