Non-RMG export-oriented manufacturing

Women's participation: The scope and challenges

Nazneen Ahmed | Monday, 12 November 2018

According to the Bangladesh Bureau of Statistics, women constitute a half of the population in Bangladesh. It is argued that gender inequality and discrimination in terms of provision of labour market opportunities may cause and spread poverty and vulnerability in society. Gender equality can be positively enhanced by economic growth, by reducing poverty and increasing opportunities. Participation in economic activities enhances financial abilities of women, which is an important indicator of their economic empowerment. The degree of impacts of economic activities on women's empowerment often depends on the place and nature of employment or economic activities. Employment status and women's empowerment are related to four empowerment indicators: a) decision making, b) freedom of movement, c) control over resources, and d) views on violence against women. It is revealed by many studies that women's employment outside their husband's farm contributes more to women's autonomy. Women's work, both paid and unpaid, may be considered as the single most important poverty-reducing factor in developing economies. Therefore, women's overall empowerment, more specifically, economic empowerment is a critical factor to move a country forward towards inclusive and sustainable development. In Bangladesh, women's participation in economic activities is low compared to that of men. The Labour Force Survey 2015-16 found that the labour force participation rate among women was 35.6 per cent while the participation rate for men was 81.9 per cent. Women are also subjected to discrimination in terms of payment of wages, as they earn significantly less than men, especially in informal employment. A significant number of women are engaged in unpaid family work (11.2 per cent of women are working as family helpers while the rate is 3.2 per cent for men). It is expected that remunerative and sustainable employment for women can be generated more in the manufacturing sector, especially export-oriented manufacturing.
The Labour Force Participation Rate (LFPR) for women is lower than that for men, though between 1991 and the 2016, women's participation in the labour market in Bangladesh underwent many positive changes. For instance, the participation rate increased from 14 per cent in 1991 to 35.6 per cent in 2016 (Figure 1). The increase has been attributed to the high growth in self-employed, unpaid women family members in livestock and poultry raising compared to previous survey rounds. Microcred it programmes are likely to have induced the growth in rural non-farm activities. These have also increased women's participation in labour market over the last 25 years.
The readymade garment (RMG) sector is the largest employer of women working in the manufacturing sector (80 per cent of women working in the manufacturing sector belong to the RMG. On an average 46 per cent workers employed in the manufacturing sector are women and the share is highest in RMG (64 per cent of RMG workers are women). Apart from RMG, women are also working in other export-oriented industries and it is possible to increase their participation in those sectors, if proper initiatives are taken. This article will explore possibilities of women's employment in some other export-oriented industries apart from RMG. For example, in industries like leather and footwear, plastic and electrical equipment sectors, the shares of women are 30, 24 and 11 per cent respectably.
Leather and leather goods sector: According to the SMI (2012), women constitute around 30 per cent of the leather sector labour force. The leather sector employs around 22,000 women, majority of them engaged in footwear manufacturing. Women's employment within the leather sector varies significantly; about 38 per cent are employed in leather footwear manufacturing, 33 per cent in the manufacturing of luggage & handbags and only 2.0 per cent are employed in tanneries. Women's participation in leather footwear manufacturing grew from 2.2 per cent in 2001 to 37 per cent in 2012. Women in recent time are interested more to work in the footwear manufacturing industry, as it does not involve heavy physical activity compared to tannery. However, production of footwear requires use of chemicals and adhesives for which special precaution is needed both for men and women. Another feature of women's employment in the leather sector is that they are employed as production and production-related workers, only 0.4 per cent of the total women engaged in this sector were owners of the business. In recent years, the number of women entrepreneurs in the footwear and leather goods sub-sectors has increased.
Scope for future women's employment in leather and leather goods (including footwear): The leather goods and footwear sector has been marked as one of the highest priority sectors in the Export Policy 2015-18 and Industrial Policy 2016 due to its high value addition and export potential. In the Industrial Policy 2016, importance has also been attached to the development of small and medium enterprises (SMEs) and cottage industries; commitments made to provide assistance to women entrepreneurs on a priority basis; stress put on setting up of special economic zones in different parts of the country, etc. All these promises are applicable to the leather and leather goods sector. The Export Policy 2015-18 also encourages production of labour-intensive products, and more involvement of women in export oriented industries and trade. To overcome the management crisis in the leather industries, the government may assist in the training of entrepreneurs. With the expansion of this sector, it is likely that women's employment in leather and leather goods industries will continue to rise. Availability of technicians is a major constraint to developing any testing laboratory for the leather goods sector. Women could be trained under the national technical and vocational education and training (TVET) system to groom them as technicians
Challenges in leather and leather goods sector: Shortage of skilled personnel and trained manpower in different occupation categories of leather goods sector will be a major constraint to future growth and this need to be addressed. Majority of the firms are small and family-based, where workers acquire skills from on-the-job training rather than from any formal education. Over time, the share of skilled workers dropped to less than 1.0 per cent in 2013 from 7.6 per cent in 2005-2006 (ADB, 2016). The increase in less skilled workers, along with their low level of education, constrains the net value-added potential of this sector. Around 26 per cent of leather firms consider the inadequately trained workforce to be a major business constraint (World Bank Enterprise Survey, 2013).
Many small leather firms are owned or managed by entrepreneurs with limited know-how and exposure to modern butchery skills, environment-friendly curing and tanning technologies, and proper waste management. Factory environment and workers' health is a concern. Inside the factories, workers are exposed to toxic waste and carcinogenic chemicals such as arsenic, chromium sulphate, and hexavalent chromium. A survey of women working in finished leather factories found that women working in these factories faced problems as follows:
* Absence of separate female toilets at the factory
* Risk of sufferings from malaria, jaundice due to mosquito and fly infestation at the workplace
* Bad smell from raw skins and chemicals
Moreover women working in tanneries are deprived of many basic rights like maternity leave, child care centre, etc. Some jobs in tanneries are not suitable for women, like the operation of hydraulic machines, due to their heavy weight. Women work in other areas like leather sorting, finishing, etc. In the footwear industry, women can comfortably work in around 90 per cent of the activities.
Plastic Industry: Plastic products have large potential for both domestic consumption and export earnings. This sector experienced almost 100 per cent employment growth during the 2006-2012 period. The share of women in employment in plastic industry was 25 per cent in 2012, up from 10 per cent in 2006. Women employment in this industry is rapidly rising, which suggests continued growth in the future as well. Around 90 per cent of the women in this sector are production and production-related workers, while 0.30 percent is entrepreneurs. According to information recorded by Bangladesh Plastic Goods Manufacturers & Exporters Association (BPGMEA), on an average, around 40 per cent of the total workforce in the plastic sector is women. Some firms even have 60 per cent women employees.
Opportunities for women in the plastic sector: Plastic products have heavy demand in both domestic and export markets. There is a big potential market for plastic products even within in the country. According to the directory of SME Women Entrepreneurs (2015) published by the SME Foundation of Bangladesh, there are 28 women entrepreneurs in the plastic sector out of 7,064 women entrepreneurs listed in it. This sector is considered as a Booster Sector by the SME Foundation, which means women who are eager to start plastic producing enterprises will receive special support from the foundation, in terms of participation in trade fairs, access to loan, etc. Therefore, women can take the opportunities to become an entrepreneur in this sector.
Employment of women in the plastic sector is quite robust compared to any other manufacturing sector other than RMG. During discussion with a plastic manufacturer, it has been noted that a worker can start working in this sector with few days of training (mainly given on the job) and they prefer women.
Challenges: There is no doubt that the growing plastic industry has created a vast range of employment opportunities. However, the sector is facing several constraints to grow. Though these constraints are general in nature, they will also affect women. The major constraints faced by Bangladeshi entrepreneurs are as follows:
* Shortage of skilled workers especially in the small and medium enterprises.
* The raw materials for plastic industry are imported mostly from Middle East countries including Qatar, Saudi Arabia and also from Singapore. Dependence on imported raw materials increases lead time for export.
* In the international market of plastic products, the main competitors of Bangladesh are China and Vietnam. In this context low-skilled manpower and dependence on imported raw materials appear to be the major constraints.
* Environmental and health concerns related to use of plastic and costs associated in handling those concerns often motivate entrepreneurs to produce low quality products, which cannot be exported.
* Lack of testing services for quality control of products.
Lacks in skills among women to run a business as well as dependence on imported raw materials are particularly difficult problems for women entrepreneurs in this sector.
Light Engineering Industry: The Light Engineering Sector (LES) has been recognised as an important sector of Bangladesh which has potential to play a significant role in economic development along with a vast scope of employment generation. Bicycle is the dominant sub-sector under light engineering. Women's employment in the bicycle sector is rising. However, lack of skills is a major constraint for women to enter this sector. Overall, in the light engineering sector, the participation of women is low as these kinds of work, which is typically heavy manual labour, is considered to be men's work. However, a few women work in their family business as entrepreneurs.
Challenges faced by the women in the light engineering (LE) sector:
* As the light engineering enterprises are scattered in many places of the country, LE entrepreneurs have long been demanding creation of an industrial park for this sector, which has not yet been materialised. Development of such an industrial park will definitely help women to be entrepreneurs in this sector.
* Access to credit is a major problem of LE. Due to the small nature of these businesses, they initiate their business venture through self-finance, and due to administrative difficulties, most of them try to avoid borrowing. The patriarchal socio-economic culture of Bangladesh makes it relatively difficult for women to get finance from the family to start a business. Therefore, availability of formal credit would be more encouraging for women.
* Since LE is considered to be a booster sector by the government (as reflected in the Industrial Policy), a comprehensive sectoral policy for LE alone be formulated to overcome the barriers and curb corruption, and to provide a clear roadmap for the sector to flourish and contribute to economic growth of the country at the desired level.
* For the LE sector to grow and flourish in Bangladesh, an enabling environment has to be created so that small manufacturing enterprises can work without any hassle and can earn a profit.
Electronics sector: According to the definition of the industrial commodity code of Bangladesh, electronic products are categorised under code 26 which includes manufacturing of computer, electronic and optical products. This category of industrial products includes the manufacture of computers, computer peripherals, communications equipment, and similar electronic products, as well as the manufacture of components for such products. In 2012, 13 per cent of the total employees in the electronics sector were women. Women are mostly engaged in the production of refrigerator, television, air conditioner, and home appliances. Walton Group is the largest electronics company in Bangladesh. In this company about 30-35 per cent of employees are women, which is higher than the national average share of 13 per cent. Women can perform a number of tasks in this industry after receiving a day's training: small parts assembling for television, automobile-related work, etc. Entrepreneurs consider women employees working in this sector to be sincere and honest. Skill is not a big issue for workers in the electronics sector, but a conducive business environment is necessary for the sector to grow. This sector has great potential to offer employment for women. They can work in the production of mobiles, laptops, tabs and desktop computers, as these products have great potential to grow in the near future. To encourage women entrepreneurs to invest in this sector, low interest credit and tax holiday could be beneficial.
Challenges and opportunities in the electronics sector:
* Small and medium electronic enterprises are facing a tough competition from the large ones as the larger companies are investing more and enjoying the benefits of large scale production and their cost of production is lower than that of small and medium industries. There are a number of small and medium electronic enterprises owned by women and therefore problems faced by small and medium entrepreneurs of this sector are also faced by women entrepreneurs.
* Supply of land in economic zones could help the small and medium size electronics firms to become competitive. Receiving finance from formal sources (mainly private banking) is also harder for the small and medium enterprises.
* Government support is required for expanding small and medium sized electronic firms. Government could really help such entrepreneurs if there were policies for import controls and tariff barriers. Government policies to enhance access to finance could really be helpful for this sector.
General discussions and recommendations
From the above analysis, it is clear that there is a big information gap regarding the participation of women in various export sectors other than RMG. The following observations can be made regarding the challenges faced by women in some non-RMG export-oriented sectors.
With the current level of technology and environmental concerns, it is difficult to increase women's employment in the leather processing sector. Current technology in the tannery sub-sector involves heavy manual work which discourages women to participate. Often it is not safe for pregnant women to participate in these activities. Therefore, women's employment should be encouraged more in leather goods and leather footwear sectors, with special precaution for use of chemicals and adhesives. In all, compliance of leather processing industries has to be improved for all workers including the female who are currently working there.
In the plastic sector, women have high potential to participate, specially in the growing toy industries. This will depend on the overall growth of this sector. This sector should be linked to the engineering goods sector so that machinery needed for toys can be locally manufactured. Skill of women is a problem for them to work in this sector, specially for the production of high value added products. Similar conclusions can be drawn for women's employment in engineering goods production. Though there are opportunities for women to work in bicycle production, they need skills. There is high demand for women workers in these sectors but lack of skill makes the women workers work mostly at the lower tier.
In the electronic sector the type of work currently done by women requires less skill and very short on-the-job skill training is sufficient for that. However, if women want to work in production of high value added product or at a sophisticated level of the value chain, they need higher skills. Access to information or information is also a problem for women to explore jobs in various export industries. It is also observed that women are mostly engaged as production workers in various industries. However, educated women could be encouraged to do management-related jobs in an industry. Training of existing workers is important, which may be linked to salary increase. Linking the enterprises with local hospital, clinic through insurance for health security of women is necessary.

Nazneen Ahmed, PhD, is Senior Research Fellow at Bangladesh Institute of Development Studies.